Man Says Twins Who Sued Facebook 'Backstabbed' Him, Sues for Settlement Money

Former Winklevoss partner claims stake in $65 million settlement with Facebook.

Dec. 14, 2010— -- Cameron and Tyler Winklevoss, the 29-year-old twin Harvard graduates, Olympic rowers and multimillionaire entrepreneurs, make no secret of their belief that Facebook founder and former colleague Mark Zuckerberg swindled them out of a fortune.

Despite taking a reported $65 million from the billionaire in a 2008 legal settlement, the twins are chasing a bigger legal payout from a partnership they say they forged with Facebook's "toddler CEO" when the three were students at Harvard.

In a recent interview with CBS' "60 Minutes," the twins said Zuckerberg was their "teammate" and "partner" who betrayed them.

"I'm not sure anybody can quite put themselves in our shoes and understand what it must have felt like to start an idea in 2002, to approach a fellow student in 2004, to have it stolen, sabotaged, ripped off," one of the Winklevoss brothers said in the interview.

But Wayne Chang said he knows exactly what it feels like to be cheated by a partner, because, he said, the Winklevoss brothers did the same to him.

"They pretty much treated me the way they say Facebook treated them," said the 27-year-old entrepreneur. "I got backstabbed."

Last December, in a complaint filed with the Superior Court in Suffolk, Mass., Chang claimed he is owed a part of the Winklevoss' settlement money from Facebook because his Web company had merged with the brothers' social network ConnectU to create the Winklevoss Chang Group.

And he's going after a piece of the $65 million. Chang said because the Facebook litigation was a shared asset of the company, he said he is entitled to a piece of the Facebook settlement.

The Winklevosses filed a motion to dismiss the complaint, which Chang has formally opposed. A January hearing is scheduled regarding the motion to dismiss, Chang said.

"I just want what was rightfully mine," he said. "I just want to go for my share of the company, my share of the partnership."

In addition to naming the Winklevoss brothers, Chang's suit names their father, Howard Winklevoss; Divya Narender, another ConnectU partner; ConnectU Inc. and the law firm that represented them in the suit against Facebook, Finnegan, Henderson, Farabow, Garrett & Dunner LLP.

He sues the Winklevosses and Narender for a number of claims, including breach of contract, breach of partnership and breach of covenant of good faith and fair dealing.

Lawyers for the Winklevosses and Narender did not respond to phone calls from Friday afternoon and Monday morning asking for comment.

Finnegan, Henderson, Farabow, Garrett & Dunner LLP declined to comment for this story.

ConnectU, i2Hub Join Forces, Form the Winklevoss Chang Group

Chang said he first teamed up with the Winklevoss brothers in 2004, after a file-sharing network he started as a student at the University of Massachusetts Amherst spread to dozens of college campuses across the country, grabbing headlines along the way.

In November 2004, Chang said, after the Winklevosses had already started their litigation with Facebook, he and the brothers created a Memorandum of Understanding (MOU) that joined his network i2hub with the Winklevoss' ConnectU.

The MOU said Chang would receive 15 percent of ConnectU after the integration.

Chang said he integrated his network with theirs and then they later formed the Winklevoss Chang Group. As partners in WCG, he said, they launched products, met with big-name companies about projects, developed new technology and shared a joint bank account. The suit includes e-mails and instant messages purportedly between the two parties showing that the WCG presented itself to outside companies as a unified company, of which Chang said he owned 50 percent.

But in April 2005, he said, after disputes over shares in WCG and the Winklevosses' refusal to fund the company's operations, the brothers told Chang they wanted to end the partnership. At the time, Chang said, the company had little revenue and few liquid assets.

Facebook Lists Chang as Defendant in Lawsuit Over Social Product

In September, after being sued by the Winklevosses over ConnectU, Facebook counter-sued ConnectU over a product called Social Butterfly. In that suit, Chang is listed as defendant.

Chang said the Winklevosses hired lawyers to represent them all and paid for his legal counsel in the Facebook suit. But he said that as proceedings continued, the group's lawyers sidelined him and didn't advise him regarding his ownership rights and interests in ConnectU and WCG.

It was from a 2009 news story -- and not his own lawyer -- that Chang said he learned that Facebook had settled with ConnectU for a reported $65 million.

"I didn't even know that a settlement like that was possible," he said. "My attorneys kept me in the dark."

In the complaint filed last year, Chang also sues the lawyer representing them, Scott Mosko and his firm, for professional negligence, claiming they ignored his interest in favor of the interests of their other clients.

Winklevoss Brothers Say Facebook Appeal Is About 'Principle,' not Money

As part of the settlement, the Winklevosses turned over 100 percent of ConnectU's stock to Facebook. Believing that his 15 percent ownership in ConnectU and 50 percent ownership in the Winklevoss Chang Group entitled him to a portion of the settlement, Chang said he started pursuing legal options in early 2009.

George Grellas, a Silicon Valley attorney with decades of experience with early-stage start-up companies, said it's not unusual for start-ups to form partnerships without extensive documentation and legal counsel.

"What most people don't realize is that you just need to have a situation where people are acting as co-owners for profit and it doesn't have to be a formal written agreement. It doesn't have to be anything that lawyers sign off on," he said. "What the law looks at is their intent."

From reviewing the complaint, he said, it seems that this particular case includes an unusually large set of documentation (including the e-mails, instant messages and informational material about the project).

But, he said, it's possible that the defendants could argue that the documentation establishes that the parties were only negotiating a partnership, not that they had actually moved forward with it.

Although Chang's complaint is about a year old, attention on his suit has been renewed, thanks to publicity surrounding "The Social Network" and the Winklevoss' efforts to appeal their settlement, saying they are owed more because Facebook misled them about the value of the company.

In the "60 Minutes" earlier this month, the twins said the appeal was not about money, but "principle."

But Chang said that to him, those words ring hollow.

"I've heard the Winklevosses speak of doing the right thing and being ethical," Chang said. "That's definitely not my experience with them. They made promises to me in writing and they refuse to live up to their promises."