Beth Wilkinson, representing Michael Rubin in an investors' suit against Rubin, eBay and GSI Commerce, tells jurors that Rue La La, a holding of GSI, was fairly valued. Plaintiffs, investors in Rue La La, claim that defendants conspired to undervalue Rue La La to avoid triggering a company earnout clause. Click here to see the full opening.
The Trial: Kevin J. Novack v. GSI Commerce Inc., et al.
The Attorney: Beth Wilkinson, for defendant Michael Rubin.
Even when a case is about numbers, it's about people... at least as far as jurors are concerned. In other words, as important as evidence like earnings reports and valuations may be to your case, if you can't tie them to a face, you risk turning that critical evidence into bloodless data and white noise to your jury. That's why it's important to tell your jury about the story the people responsible for those numbers, which Beth Wilkinson did in a case that revolved around a business's valuation: Novack v. GSI Commerce.
Plaintiffs, investors in online sales company Rue La La, sued GSI, its founder Michael Rubin, and Internet auction giant eBay, claiming that the defendants conspired to lower the valuation of Rue La La, a holding of GSI, in order to avoid triggering an earnout provision. As you would expect, Rue La La's financial performance and valuation estimates were central to the case. In her opening statement, Wilkinson masterfully mixes hard numbers with the key people involved in Rue La La and GSI, including her client Michael Rubin. She details the emails between Rubin and other members of company leadership as they struggle with the mixed fortunes of Rue La La and their earnest attempts to increase its revenue. At one point, she highlights an email Rubin sent Bejamin Fischman, Rue La La's CEO, shortly after GSI bought Rue La La. The email detailed Rubin's thoughts on the on the best ways to trigger the earnout. "I want you to focus on that," Wilkinson tells jurors. "(Plaintiffs') allegation is that Mr. Rubin wants to kill the value of a business he just bought.... And that just doesn't make sense. Why would you buy something and then want to bring the price down? (Rubin) wants to help them make the earnout, not just because he's a great guy, but he makes money if they make the earnout, right? Profit-sharing."
Of course, Wilkinson also details the numbers: Rue La La's failure to meet financial expectations, and valuations that were far below plaintiffs' claim of the company's worth. However, it was Wilkinson's emphasis on Rubin and the people behind those numbers that helped make those numbers mean something... and paved the way for a defense verdict.