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Business News Legal Live Business
Aggrieved Eventbrite investors settle as ticketing sector continues to tackle the COVID crisis
By Chris Cooke | Published on Tuesday 11 August 2020
Legal reps for aggrieved Eventbrite investors say that they have negotiated a $1.9 million settlement with the ticketing company and that, given the current issues facing the wider live entertainment sector, they’d rather accept that and move on.
Investors in Eventbrite went legal last year over allegations that the company had made false or misleading statements ahead of its initial public offering in 2018, in particular in relation to its earlier acquisition of rival Ticketfly and the integration of the two company’s platforms.
The litigation came after Eventbrite’s share price took a bashing in March and May 2019 in the wake of official updates on revenues and revenue projections – which were lower than expected – and the ongoing challenges around the integration of the Ticketfly and Eventbrite systems.
That admission that the integration of Ticketfly was proving problematic contradicted what Eventbrite had said in the run up to the 2018 IPO, plaintiffs in the case argued. Which meant the company had deliberately misled potential investors about the business.
For its part, Eventbrite denied those allegations, called the investor lawsuit “baseless” and sought to have it dismissed. And in April the judge overseeing the case did just that, concluding that the allegations in the investor’s litigation were too “vague”. But the plaintiffs were told they could submit an amended complaint dealing with those issues if they so wished.
However, according to Law360, on Friday those investors told the judge that they’d agreed a settlement deal with Eventbrite, and that they’d rather get court approval of that deal rather than continue to pursue their legal battle.
The $1.9 million payout provided by that deal is less than the plaintiff’s hoped to secure, but – they noted in a court filing – similar litigation against Eventbrite in the Californian state courts had also been dismissed. Meanwhile, the challenges faced by Eventbrite as a result of COVID-19 reduced the prospect of a better pay-out down the line.
They told the judge: “Dimming the prospects of any recovery, during litigation, the world was struck by the worst pandemic it suffered since 1918 – particularly bad news for a company whose business is helping customers plan live events”.
“With claims against Eventbrite dismissed in state and federal court”, they went on, “and the company’s future uncertain, the prospect that settlement class members would recover anything looked dim. Yet, lead counsel nonetheless were able to negotiate the $1.9 million settlement”.
And while a lower sum than originally hoped, that cash “will nonetheless prove meaningful for settlement class members”.
