A lawsuit that accuses the executives who sold MySpace to Rupert Murdoch's News Corporation for $580m in 2005 of undervaluing the popular social networking website and defrauding shareholders of billions of dollars is set to go to trial.
The trial was made possible after a US federal judge ruled against a motion to dismiss the lawsuit.
The suit accuses ex-senior executives and directors of MySpace parent company Intermix, and its venture capital backer VantagePoint Venture Partners, of defrauding shareholders of billions of dollars by engineering the sale.
Brad Greenspan, the former chairman of eUniverse, which was renamed Intermix, said in a statement: "I knew that the value of the company was billions of dollars, however, the deceptive practice of hiding MySpace financials by Intermix management robbed shareholders of their opportunity to adequately gauge the company's value."
The suit names former Intermix chief executive Richard Rosenblatt, former president Brett Brewer and VantagePoint.
The ruling is the latest in a series of legal challenges in protest at News Corp's purchase of Intermix.
Greenspan mounted a legal challenge in 2006 in which he said the deal to buy MySpace defrauded shareholders by undervaluing one of the internet's most popular social networking sites. The legal challenge was rejected in October 2006 by a Los Angeles judge.
Greenspan said he had bid against News Corp to buy the rest of Intermix that he did not own, but lost after Intermix's board voted against his offer.
MySpace rival Facebook was valued at $15bn a year after MySpace was sold, although the News Corp-owned site is the market leader in the US. It has 71.92% of the market compared to Facebook's 16.91%, according to recent Hitwise figures.
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