FanDuel Founders Renew Legal Battle in New York

The cofounders of FanDuel have intensified their legal efforts to reclaim equity they allege was lost during the company's 2018 acquisition by Paddy Power Betfair, now Flutter Entertainment. In an amended lawsuit filed in New York, they argue that board members influenced by private equity firms KKR and Shamrock Capital undervalued FanDuel at $559 million, allowing these investors to secure 100% of the company's equity post-merger, while sidelining early shareholders. The lawsuit, originally filed in Scotland, has faced various legal hurdles but was recently allowed to proceed by the New York Court of Appeals. The cofounders claim the undervaluation was a deliberate act to benefit preferred shareholders at the expense of common shareholders, which has become particularly significant as FanDuel's value has risen to over $20 billion. They are seeking compensatory damages and are pushing for a jury trial, with allegations of fraud and breaches of fiduciary duty detailed in the complaints. Nigel Eccles, one of the cofounders, emphasized the new claims of fraud and conspiracy under Scots law as part of this legal battle.