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.”
Minor Ventures is a venture capital firm founded by CNET founder Halsey Minor that focuses on early-stage tech and media companies.
Scout Labs is a powerful, web-based application that finds signals in the noise to help your team build better products and stronger customer relationships. Scout Labs is a product company, not an agency. They provide cutting-edge technology and a collaborative platform for companies and their agents to listen to customers and engage with them out across the Internet. With Scout Labs, users can: Know when to tune in and whatâ€™s most important to pay attention to Hear what customers love and hate...
Lithium helps top brands find online and mobile social customers, understand their influence, and build lasting relationships. The Lithium Social Customer Suite offers comprehensive social monitoring, creative customer experiences, and actionable analytics across millions of blogs, forums, and social networking sites. Our technology is proven in high-volume, growth environments and provides security, open and custom APIs, and multi-language support. For market leaders such as Best Buy, AT&T, Research In Motion Limited (RIM), Univision, and PayPal, Lithium is the leading provider...