Dallas-based Match Group is paying out more than $400 million in a settlement involving early Tinder employees.
Amid the trial, the company that provides a variety of online dating applications announced a settlement of the lawsuit brought by Tinder co-founder Sean Rad and others on Wednesday, according to a filing in with the U.S. Securities and Exchange Commission.
With the agreement, Match will pay $441 million, and “plaintiffs will dismiss all claims presently on trial and in arbitration related to the 2017 Tinder valuation,” the company said, noting it affects the case in the New York Supreme Court and the related arbitration.
The case was brought in 2018 against Match and its then-parent IAC. The lawsuit accused the company of manipulating financial information and sought at least $2 billion. Among the contentions: The valuation of the popular service was distorted. There was consequent underpayment to the plaintiffs upon exercise of their Tinder stock options, according to a November SEC filing.
Match (Nasdaq: MTCH) separated from IAC in 2020.
The company – given the uncertainties inherent in jury trials – said in a November filing that there is at least a reasonable possibility of an exposure to loss. That amount “could be anywhere between a nominal amount and $2.5 billion,” it said. At the time, the company said it believed the allegations were without merit.
Match intends to pay the settlement from cash on hand. It had about $510 million in cash and cash equivalents at the end of the third quarter.
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Additional reporting by Natalie Posgate of The Texas Lawbook:
Match Chief Business Affairs and Legal Officer Jared Sine hired a New York-based team from Wachtell Lipton Rosen & Katz and Susman Godfrey to represent it in the trial. The Wachtell team includes, Steve DiPrima and Carrie Reilly and the Susman team includes Bill Carmody and Shawn Rabin. The in-house team at Match includes Associate General Counsel of Litigation & IP Jeanette Teckman and Senior Corporate Litigation Counsel Sam Kitchens.
The Tinder founders hired a primarily New York-based team from Gibson, Dunn & Crutcher, including Orin Snyder, Matt Benjamin, Laura O’Boyle, Laura Raposo, Connor Sullivan and Greta Williams. Co-counsel was Josh Dubin of New York.