Just three months ago everyone was happy. Lithium Technologies, which has a suite of social CRM solutions, picked up Scout Labs for a reported (by us) $20 million. Minor Ventures, which incubated Scout Labs, was able to take a nice, if small, liquidity event.
Things aren’t so happy now.
In a lawsuit filed in San Francisco Superior Court, Minor Ventures accuses Lithium Technologies of intentional misrepresentation, fraud and fraudulent concealment. The Lithium Technologies stock Minor Ventures received in the transaction was only worth half of what Lithium Technologies supposedly promised it was worth. Like many lawsuits, it reads like a good novel:
The entire amount at stake is around $5.5 million (half of the promised $11 million or so in stock received). Minor Ventures is also asking for punitive damages as well. We’ve embedded the full complaint below.
We’ve reached out to Lithium Technologies for their side of the story and will update with any comments.
Update: Lithium Technologies says “This lawsuit is completely without merit and we intend to vigorously defend ourselves,” said Lyle Fong, Founder and CEO of Lithium Technologies. “Lithium is a thriving, vibrant business and a leader in the growing Social CRM market.”