FanDuel founders case: Defendants say Eccles “mismanaged” company “into the ground”

The latest volley in the FanDuel founders case has landed with a bang. The case pits former CEO Nigel Eccles, alongside dozens of early investors and common shareholders of FanDuel, against an allegedly conflicted board and private equity investors accused of intentionally wiping out those common shareholders in a 2018 merger with PaddyPower Betfair (PPB).

Plaintiffs have until 14 November to oppose the 16 September motion to dismiss the expanded complaint. Shamrock Capital Advisors, KKR and former board members including former FanDuel CFO-turned-CEO Matt King are named. King is now the CEO of Fanatics Betting and Gaming. He is individually facing a separate charge for fraud in the expanded complaint.

In moving to dismiss causes of action including breach of fiduciary duty, conspiracy, breach of contract and fraud, among others, attorneys for the defendants write preliminarily, “Plaintiffs’ new allegations and newly cited discovery documents lift the curtain on this case, exposing that their claims are, and always have been, hollow.”

Case falls under Scots law

The defendants also write that “after lead plaintiff Nigel Eccles mismanaged [FanDuel Ltd] into the ground, the director defendants were forced to step in, pursue a buy-out that plaintiffs had facilitated and accept the highest available offer – indeed, the only lifeline that would save FanDuel Ltd from collapse.”

Except for the one claim against King individually, the case falls under Scottish or “Scots” law. Earlier activity in the case determined that the relevant actions and events occurred in Scotland, where FanDuel was headquartered.

The plaintiffs filed their second amended complaint on 8 August. That followed a favourable ruling in May from the New York State Court of Appeals, which held that the plaintiffs did state a valid claim that the director defendants owed the shareholders a fiduciary duty.

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