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ConnectU founders hold up Facebook settlement

Pair claim transferring stock would hamper appeal

ConnectU, the social networking site that claimed Facebook's creators stole its idea, is stalling on some of the terms of its settlement following its failed legal action.

Cameron and Tyler Winklevos, the pair behind ConnectU, had attempted to sue Facebook claiming that its creator Mark Zuckerberg stole their idea for the social networking site. The pair accepted an undisclosed sum from Zuckerberg after a US judge rejected their claims that Facebook had committed fraud by failing to disclose crucial documents related to Zuckerberg's actions. The settlement was thought to have included the purchase of ConnectU for cash and common stock.

However, ConnectU has been stalling on transferring its stock and is claiming Facebook misrepresented its value during talks. ConnectU says that after Microsoft bought a stake in the company, on paper it was valued at $15bn (£7.5bn). But Facebook disputed this saying the $15bn was specific to Microsoft's preferred stock and the business deal surrounding it, and said the real valuation for the site was $3-4bn (£1.5-2bn).

ConnectU is appealing against the decision and has claimed that transferring stock now would hamper the appeal process. However a US judge has told the ConnectU's founders that before an appeal can go ahead, the settlement must go through.

"The longer the court delays in enforcing the settlement between the parties, the more like the value of the consideration subject of the settlement will change," he said.

"Any further delay in enforcing the settlement will create a serious risk of prejudice to Facebook, as well as to ConnectU."


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