WILMINGTON, Del. (Legal Newsline) – The Delaware Court of Chancery has ruled to dismiss counterclaims in a case involving brothers Tyler and Cameron Winklevoss over alleged breach of commitments in a magazine investment deal.
The court ruled to dismiss the claims of defendants Stephen Shaw, Treats! LLC and The Westerman Trust, stating they had been filed too late.
"I am satisfied defendants’ counterclaims must be dismissed as time-barred because they were filed after the expiration of three-year statute of limitations and no tolling doctrine applies," Delaware Court of Chancery Vice Chancellor Joseph R. Slights III wrote in his opinion.
According to the March 1 memorandum opinion, the Winklevoss twins - who gained famed after the 2010 release of "The Social Network" that spotlighted their relationship with Facebook and their litigation against founder Mark Zuckerberg - entered into a business deal through their Delaware limited liability company, Winklevoss Capital Fund (WCF), with Stephen Shaw, a professional photographer and founder/manager of Treats! LLC.
The brothers alleged that in 2011 after making a $1.3 million investment through their newly found company in Shaw's Treats! Magazine, which depicts nude and semi-nude photography of models and celebrities, they had not "achieved the return on investment" Shaw had promised due to the Shaw's "mismanagement" of the magazine, the order states.
Shaw denied the mismanagement allegations and made counterclaims against the brothers, claiming they breached their commitments to help publicize their investment in Treats! after the brothers' notoriety had peaked with the release of "The Social Network" movie.
Shaw argued that he "pressed" the brothers to help promote the magazine as the brothers were encouraging Shaw to "enhance their personal and professional profiles."
According to the opinion, Tyler Winklevoss had asked Shaw to set up a "special casting" in 2012 with models he found on Facebook and a modeling agency website and instructed Shaw to "call the hot ones up" so Tyler could meet them.
Shaw also claimed the brothers sought out Shaw to gain celebrity involvement in the brothers' new website and other investments, but could not gain the brothers' promised help in promoting the magazine, despite Shaw's repeated request.
In late 2012, the brothers told Shaw they were no longer interested in Treats!
The plaintiffs filed their complaint in June 2018 against the defendants over allegations of breach of amended LLC agreement, breach of fiduciary duty and other counts. The defendants' answer and counterclaim was filed in July 2018, the plaintiffs moved to dismiss it the same month.