Law360 Highlights Joe Gallagher’s Arguments in Hearing for BuzzFeed Employee Dispute Over IPO
July 28, 2022
Law360 covered partner Joe Gallagher’s arguments before the Delaware Chancery Court yesterday in a (subscription-required) article on a hearing tied to the firm’s action against BuzzFeed (NASDAQ: BZFD). Gallagher, along with partners Yonaton Aronoff and Jonathan Harris, initially filed a demand for arbitration in March on behalf of 42 former BuzzFeed employees, all of whom say that they were shortchanged in the media company's initial public offering (IPO) last year.
The former employees allege they were wrongly locked out of their BuzzFeed shares when the company went public on December 6, 2021. This lockout, the employees claim, prevented them from selling their shares after BuzzFeed’s merger with a publicly-traded special purpose acquisition company (SPAC) became official.
Gallagher appeared alongside counsel representing a similar group of present and former BuzzFeed employees who have levied the same claims against BuzzFeed. Law360’s story detailed oral arguments made by both groups asking the court to allow them to continue arbitrating through the AAA under BuzzFeed’s pre-SPAC-merger employment agreements.
The article highlighted an important line of questioning between Vice Chancellor Morgan T. Zurn, the judge overseeing the case, and Gallagher regarding some of BuzzFeed’s arguments.
During the exchange, Zurn asked Gallagher to explain why she should treat the new BuzzFeed Inc., which she referred to as "NewCo," as a stand-in for BuzzFeed Media Enterprises (BME), an entity that BuzzFeed’s lawyers claimed was the new employer of the staffers following the SPAC merger.
"Is there any indicia that BME does not want to comply with the employment agreement?" the vice chancellor asked Gallagher.
"We don't know either way," Gallagher replied. "We just know that BuzzFeed doesn't want to."
"Why should I conflate BME and NewCo?" Vice Chancellor Zurn asked.
"Because BuzzFeed, BME and NewCo do it themselves," Gallagher said, pointing out recent letters to employees on BuzzFeed Inc. letterhead that address various employment obligations.
The case is BuzzFeed Inc. et al., v. Hannah Anderson et al., case number 2022-0357, in the Court of Chancery of the State of Delaware. The employee defendants in this matter are also represented by Kevin D. Galbraith and Taylor N. Perretti of The Galbraith Law Firm, Sean R. O'Brien and A.J. Monaco of O'Brien LLP and David A. Felice of Bailey Glasser LLP.