New York Magazine Quotes Yonaton Aronoff, Lead Plaintiff in its Coverage of the Firm’s Representation of BuzzFeed Employees
June 29, 2022
New York Magazine’s Intelligencer quoted Yonaton Aronoff and HSW client Hannah Anderson in a recent article covering the firm’s action against BuzzFeed (NASDAQ: BZFD). Ms. Anderson is one of the 42 former BuzzFeed employees represented by the firm, all of whom say that they were shortchanged in the media company's initial public offering (IPO) last year. Aronoff, Jonathan Harris and Joseph Gallagher lead the firm’s efforts in this case, which could have lasting implications for employers and employees of post-SPAC Delaware companies.
The Intelligencer’s story features in-depth interviews with BuzzFeed executives and subject matter experts, as well as employees who allege they were locked out of their 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, or SPAC, became official. At the time the Intelligencer article went live, BuzzFeed shares traded around $1.68 — a freefall of nearly 85% since the IPO.
Anderson, who wrote sponsored content for BuzzFeed from 2011 to 2015, was among a number of employees who agreed to receive options for shares in the company — often at the expense of foregoing market-competitive salaries — with the intention of selling their equity at the earliest possible moment when BuzzFeed went public. She had calculated that her expected proceeds from the BuzzFeed SPAC would be enough to send both of her children to college. However, when her husband logged into their brokerage account to sell her shares while she was at an obstetrician appointment, they were not available to trade. By the time they were, the stock had fallen at least 60% from its first-day high.
“I was literally refreshing the CNBC web page while the doctor was going over the signs of labor with me,” Anderson told New York Magazine. “We were so excited. And then it just all came crashing down.”
Aronoff characterized the pre-IPO process orchestrated by BuzzFeed and its transfer agent Continental as “pretty unique in the amount of negligence, at least, that was built into the process, and dysfunction.”
The firm initially filed a demand for arbitration against BuzzFeed on March 15, 2022, alleging that the media company failed to instruct its former employees on how to sell their shares properly in the days leading up to its IPO—instruction they could not have gotten from any other source. BuzzFeed’s failure meant that the former employees could not sell, or even access, their shares before the share price cratered later that day. The filing alleges that the named employees, who held 400,000 cumulative shares of BuzzFeed stock, could not sell their shares until at least several days after BuzzFeed’s IPO, when they were worth a small fraction of their IPO value.
In response, BuzzFeed’s attorneys have sued the claimants, as well as another group of present and former BuzzFeed employees separately arbitrating identical claims, in Delaware state court in an effort to short-circuit the arbitration – a strategy that will have serious consequences for professionals at post-SPAC companies if successful.
BuzzFeed’s callous response and countersuit have, unsurprisingly, rubbed its employees the wrong way. “It felt like them punching down a little bit, showing me that they don’t give a shit,” Anderson said when asked about BuzzFeed’s decision to sue its employees in Delaware court.
Aronoff indicated BuzzFeed has shown “zero interest” in discussing a settlement, and that he and the firm are dedicated to taking all measures necessary help their clients obtain justice.
“This mattered to people who didn’t matter to BuzzFeed,” says Aronoff.