In the latest real estate news, more than $60 million dollars are at stake as legal tensions mount between Zillow and News Corp’s Move Inc., acquired by Rupert Murdoch in 2014.
At the center of the debacle?
Former Move Inc. exec Errol Samuelson, hired by Zillow in March 2014.
What’s the stink?
Move Inc. is suing Samuelson and Zillow for allegedly hijacking trade secrets: Specifically, using info stolen from Realtor.com to gain an advantage in the market. Samuelson was banned from working at Zillow by a Washington State Superior Court Judge but that ban was lifted last year.
Who’s spending the big bucks?
Zillow, in a recent SEC filing, noted legal costs related to the litigation climbed to $27.1 million last year, and are expected to rise to a cool $36 million in 2016. Adding insult to injury: Zillow’s fourth quarter profits fell short of expectations this week.
The he-said, she-said:
In a recent CNBC real estate news interview, Spencer Rascoff, CEO of Zillow, responded to a question on legal costs, “We are focused on innovating, News Corp. is focused on litigating. Unfortunately, you see this all too often in business where companies who lose on the business battlefield resort to the court room out of desperation.” He further described the lawsuit as “vindictive and baseless.”
- Move Inc.
In response to Rascoff’s statement, Move issued a statement noting the accusations were based squarely on the merits of the case, not emotions. Also, the lawsuit was filed by Move well before News Corp owned the company, It further pointed out Zillow’s own SEC filings, which concluded the ‘reasonable probability’ that Zillow will suffer a loss in the lawsuit – and pointed to recent hearings on evidence destruction by Zillow.
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