Statement on Friend Finder Networks

In early 2021, I returned to FriendFinder Networks (FFN), a company I founded in the 1990s, with the intention of helping it innovate and grow. My first step was to acquire the majority of FFN's debt for $60 million (later cutting interest payments in half). As part of this transaction, I allowed Jonathan Buckheit, who was the CEO at the time but held no stock in the company, to acquire 51% of FFN's equity and control for just $1,000.

Simultaneously, Mr. Buckheit and I entered into a Call Option Agreement on February 18, 2021. It is my opinion that this agreement granted me the right to repurchase the his unvested FFN shares at a predetermined price of $5 million anytime I wanted for any reason over the next 12 years.

Over time, different visions for the company's future emerged. Consequently, I was not actively involved with the company's operations for the past couple of years.

On August 10, 2023, I filed a lawsuit in the United States District Court for the Northern District of California (Case No. 5:23-cv-4056) seeking to enforce my rights under the Call Option Agreement. The lawsuit alleged that when I attempted to exercise my option to purchase the shares in February 2023, Mr. Buckheit refused to recognize the validity of the agreement.

As of July 2, 2024, the case has been settled amicably out of court. As a result of this settlement, I now have about 80% ownership of the company, and there has been a change in the CEO position.

This resolution marks a significant transition for FFN. I'm looking forward to working with the dedicated team at FFN as we focus on innovation and growth to enhance our services for users and create value for all stakeholders.

The full text of the original complaint is here.