Match Group Inc said on Wednesday it would pay Tinder founders $441 million to settle a case in which the dating app's executives claimed the parent company lowballed the app's value to avoid paying billions of dollars.
The lawsuit in New York Supreme Court had stated that IAC/InterActiveCorp and its subsidiary, Match, deliberately prevented the plaintiffs, including Tinder founders Sean Rad, Justin Mateen and Jonathan Badeen, from cashing in stock options they could exercise and sell to IAC.
The plaintiffs were given stock options in Tinder as part of their compensation in 2014, but because Tinder is a private company, they were not able to exercise their options and then sell stock on the open market.
Instead, they were allowed to exercise their options and sell only to IAC and Match on specific dates, on which the stock options would be independently valued.
However, IAC and Match then merged Tinder into Match without the consent of Tinder's board of directors and canceled the future dates for exercising options, according to the lawsuit.
Tinder is one of Match Group's biggest and fastest growing brands that has amassed millions or users worldwide and has benefited during the pandemic with many consumers using the app while locked in at home.
Match said it intends to pay the settlement from cash on hand.
(Reporting by Nivedita Balu in Bengaluru; Editing by Maju Samuel) ((Nivedita.Balu@thomsonreuters.com; Twitter: @niveditabalu;))