A lawsuit against the executives who sold MySpace parent Intermix to News Corp in 2005 will go to trial after a U.S. federal judge ruled against a motion to dismiss it.
The suit accused ex-senior executives and directors of Intermix, and its venture capital backer VantagePoint Venture Partners, of defrauding shareholders of billions of dollars by engineering the $580 million sale of Intermix to News Corp.
U.S. District Court Judge George King, of the Central District of California, rejected on July 14 several counts of a motion by defendants to dismiss the lawsuit.
"I knew that the value of the company was billions of dollars, however the deceptive practice of hiding MySpace financials by Intermix management robbed shareholders of their opportunity to adequately gauge the company's value," Brad Greenspan, former chairman of eUniverse, which was renamed Intermix, said in a statement on Thursday.
The class action suit was filed by law firm Coughlin, Stoia, Geller, Rudman, & Robbins LLP. Greenspan is not a client of the firm and is only a member of the class, he said in a statement.
He said discovery for the trial was expected to begin shortly.
The suit names former Intermix CEO Richard Rosenblatt, former President Brett Brewer, and VantagePoint.
Rosenblatt declined to comment. Brewer was not immediately reachable. VantagePoint Managing Director David Carlick, who was an Intermix board member and who is also named as a defendant, was not immediately reachable.
The ruling is the latest in a line of legal challenges, most notably, Greenspan's protest of News Corp's purchase of Intermix. At the time, he said the deal defrauded shareholders by undervaluing one of the Internet's most popular social networking sites.
Greenspan said in 2006 he had bid against News Corp to buy the rest of Intermix that he did not own, but lost after Intermix's board voted against his offer.
In October 2006, a Los Angeles judge rejected Greenspan's legal challenge against News Corp.