Who gives a flying f....
"Ousted partner sues Xfund’s Chung, claiming fraud and defamation" by Katie Benner New York Times May 17, 2016
SAN FRANCISCO — Xfund, a beleaguered venture capital firm that has put money into startups like genetics company 23andMe and real estate outfit Zumper, is breaking new and belligerent ground in the normally discreet world of technology investors.
If you are 23 you have to share it with law enforcement.
A complaint filed Friday in Santa Clara County Superior Court in California by Hugo Van Vuuren, one Xfund founder, against Patrick S. Chung, the other founder, and the fund itself, includes accusations of secret contract amendments, bullying, and schoolyard name-calling.
Chung called Van Vuuren a “spiteful moron” and “a trivial person pursuing trivial things” in e-mails, according to court documents. Chung also wrote that working with Van Vuuren was “like working with a retarded person” and that Van Vuuren would be worth more “dead than alive once we have key-man insurance.”
Van Vuuren alleges in his suit that Chung committed fraud by secretly amending their partnership agreement to take full control of Xfund’s investments and operations.
Van Vuuren also claims that Chung had a fiduciary duty to tell him about any changes to their agreement, but that when he was asked to sign the amended documents at the end of 2014, Chung mentioned only the fact that they had been altered to include a way to share proceeds from successful investments with new employees.
Last May, a lawyer for Xfund at Ropes & Gray e-mailed Van Vuuren to say that the agreements were drafted so that Xfund remained a “marriage of two equals,” but later that law firm told Van Vuuren to have an independent lawyer review the amendments that he had signed, the complaint states.
Xfund investors have tried to salvage the fund by approving a plan to support a scaled-back version that would be run solely by Chung, possibly with a third party monitoring his work, said an investor in the fund, speaking on the condition of anonymity.
But the intervention has not stopped the fight from heading to the courtroom. Van Vuuren has indicated that he has no plans to step aside, and he is pushing for a court trial, which could further embarrass Xfund and its investors.
A representative for Van Vuuren declined to comment beyond the lawsuit. An Xfund representative called the allegations bewildering and noted that Van Vuuren was a signed counterparty to all the fund formation documents.
Xfund began in 2011 as a small seed fund created to invest in startups out of Harvard University and the Boston area before it blossomed into an operation with an office and investments in Silicon Valley.
The cofounders have been fighting for nearly two years. As their relationship fell apart, Van Vuuren contends that Chung blocked his investment ideas and looked for ways to lessen his influence.
He says Chung offered David J. Malan, a professor at Harvard, a share of Xfund’s profits for help with Xfund matters, in an attempt to “obtain an East Coast-based resource to replace Van Vuuren,” according to the court documents.
The complaint accuses Chung of defamation for seeking a restraining order in March, saying the move was an attempt to keep Van Vuuren away from an Xfund-sponsored event, and from the committee that was deciding how best to advise investors on how to act given that the fund’s partners could no longer work together.
I was told we were all better off working alone.
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UPDATE: Nasty fight undoes promise of Xfund venture firm
