Tinder co-founder Sean Rad got heated with attorneys for Barry Diller’s media empire on Tuesday, accusing the companies he’s suing for billions of misrepresenting evidence.
“I just think you’re characterizing things in a pretty manipulative way,” said a fiery Rad while being questioned by Bill Carmody, an attorney for Match Group and IAC.
Rad made the accusation during questioning about a contract he signed with bankers from Jefferies, an investment bank that worked with him during a key Tinder valuation process in 2017.
Rad claims that Tinder was unfairly valued at $3 billion because Diller allies shared “doom-and-gloom” numbers with outside investment banks — and that the hookup app should’ve actually been worth at least $13.2 billion.
Rad and the other co-founders say the low valuation tanked the value of their stock options and are seeking $2 billion in damages. Rad, who came up with the idea for Tinder while working at a Diller-owned incubator in 2012, made off with nearly $400 million from the transaction but says he’s entitled to an additional $1.2 billion.
The high-stakes Manhattan Supreme court jury trial — which kicked off last week and saw hours of testy testimony from Diller himself on Monday — turned especially hot on during the founder’s third day on the stand.
Sean Rad came up with the idea for Tinder while working for a Barry Diller-owned incubator in 2012.Getty Images for Fast Company
Lawyers for both sides repeatedly squabbled over what evidence could be introduced during Rad’s testimony — and even clashed over what happened during a 10-minute bathroom break.
When people are under oath in court, they’re not allowed to talk to their attorneys outside the courtroom about their testimony until they’re no longer under oath. But Carmody told Judge Joel Cohen that he had a photo of one of Rad’s attorneys putting his arm around Rad and entering a private area with him during a break in Rad’s testimony.
Carmody did not say he had proof that Rad was discussing his testimony but asked the judge to remind the court that doing so was forbidden.
Rad attorney Orin Snyder then demanded to see any photos that had been taken of his client and insisted, “I know the rules. I abide by the rules.”
Judge Cohen, for his part, said he was “willing to take it on faith that nobody has violated any rules” and asked both parties to “dial it down.”
“Maybe we do need to open up some windows in here because something is in the air,” Judge Cohen said.
After the court returned from a lunch break, however, Rad attorney Josh Dubin accused Match Group general counsel Jared Sine of taking photos of Rad and his team in violation of court rules, saying it “frightened” members of the group.
Judge Cohen then admonished Carmody for leaving a “pretty clear suggestion of wrongdoing as opposed to a generic raising of the issue” and ordered the Match team to turn over any photos they had taken of Rad and his team.
Barry Diller denied accusations that he threatened Rad and his family during his testimony on Monday. Alec Tabak
Sine himself later stood up and apologized, saying his photography was “definitely was not malicious in intent or anything of that nature” and that he didn’t realize he’d broken a rule.
Much of the trial has centered on emails and messages exchanged between Rad and the bankers from Jefferies, whom he hired to advise him during the 2017 valuation process, which was conducted by Deutsche Bank and Barclays using what Rad claims were bogus figures provided by Diller’s companies.
Carmody sought on Tuesday to portray the Jefferies bankers as biased toward a higher valuation, pointing to a compensation agreement where the bankers would earn a $1.5 million fee if the outside banks evaluating Tinder ended up valuing the app at $3 billion or below, but would earn as much as $18 million for a $9.5 billion valuation.
Rad’s camp says the bankers were simply pushing for a fair valuation, not an unjustifiably high one. Bankers from Deutsche Bank and Barclays, who have not been accused of wrongdoing, are expected to testify later this week.
Judge Cohen has said he wants to wrap up the trial before Thanksgiving and has given Dec. 3 as a hard date for the end of the trial. But testimony from Rad and other witnesses appears to have dragged out for longer than expected and Rad’s team argued Tuesday that Dec. 3 may be too early of a date to end the trial.
Tinder was valued at $3 billion in 2017 but Rad says it was actually worth at least $13.2 billion.GC Images
Tuesday’s bickering came one day after Diller told jurors that lying to banks about Tinder’s prospects “would be wrong” and denied accusations that he threatened Rad and his family during the valuation spat.
Thomas Claps, a Susquehanna litigation analyst, said that Diller’s testimony likely won’t prove decisive in the suit since the mogul didn’t closely oversee in the 2017 valuation process.
“Despite the occasional periods of courtroom drama when Diller grew increasingly agitated by Plaintiffs’ lawyers, we don’t believe either side gained a clear advantage,” Claps wrote in an investor note shared with The Post. “Overall, while Plaintiffs’ sparring with Diller was lively, we don’t believe Diller’s testimony will have a dramatic impact on the outcome of the case – versus the testimony of others like Rad, Blatt, and the banks who were more intimately involved in the 2017 Tinder valuation process.”
Rad spokesperson Brandy Bergman and Match spokesperson Justine Sacco did not immediately respond to requests for comment.