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by darkerside 775 days ago
Wouldn't a contract like this be considered unenforceable? There were no services rendered, no exchange of value
4 comments
unyttigfjelltol 775 days ago
The issue is they dropped a bet-the-company litigation on 1,000 startups that are not positioned to do anything but close operations.
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darth_avocado 775 days ago
The contract SHOULD be unenforceable, however, not sure if bankruptcy court will actually resolve that matter. Maybe it would be a separate lawsuit?
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SpicyLemonZest 775 days ago
IIUC, the problem is that the founders have no good way to force a resolution at all until whoever buys the warrants attempts to exercise them.
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deaddodo 775 days ago
It's not about the former point, in contract law, but the latter. They could have rendered services, but if they're far out scaled to what the other party offered they would be considered inequitable and breachable.

This is the primary basis that California used to disqualify non-executive non-competes (before they were outright legislated out).

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lupire 775 days ago
California's basis was "reatraint of trade". Equitability was not a factor, regardless of how much was paid for the noncompete.

The legal basis for voiding contracts is "unconscionability".

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deaddodo 774 days ago
> Equitability was not a factor, regardless of how much was paid for the noncompete.

There was no equitable value, which directly led into economic restraint and servitude arguments.

> The legal basis for voiding contracts is "unconscionability".

Not sure what you're referring to here, but you should review "balance of contract" and "fair and equitable terms" in US and California contract law.

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langsoul-com 775 days ago
Founder has no money to pay for lawyers. No doubt those fees would bankrupt the company completely.
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deaddodo 775 days ago
It's important to note that legal fees can be deferred in California, for this exact reason.

In addition, if they have a strong case and a law firm believes they could gain more than their fees, they'll often still take the case.

In other words: Do not let the idea of vague "legal fees" scare you off from pursuing a genuine grievance. At least consult with a few law firms.

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