Matterport appeals lower court ruling that awarded $79 million to former CEO Bill Brown over rules that prevented him from selling his shares when the company went public.
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Matterport on Tuesday appealed a court ruling that found the company’s ex-CEO was entitled to $79 million over an issue stemming from its initial public offering in 2021.
The leading 3D digital home scanning company filed a notice of appeal on Tuesday with the Delaware Supreme Court in a case that could have implications for an ongoing sale to CoStar.
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The appeal comes just days after Matterport’s shareholders voted overwhelmingly to approve the sale to CoStar. It seeks to challenge a lower court ruling that found the company improperly prevented former CEO William Brown from selling his shares before the company went public in 2021.
In late May, Vice Chancellor Lori W. Will ruled that Brown was entitled to collect money from Matterport based on the company’s higher share price when it went public.
Former Matterport CEO Bill Brown is entitled to recoup $79 million from the company he once led. Brown had sought to recoup $141 million from the company, an amount he came to based on the peak value of his shares when Matterport went public.
The opinion came at a sensitive time for Matterport, which CoStar is attempting to buy for $1.6 billion. CoStar CEO Andy Florance told Inman this month that the sale was on track and passing through regulatory review. He didn’t mention the legal issue with Brown.
“What we know is that a high-quality, easy-to-build, 3D digital twin is the best way to experience real estate online. And it’s been underutilized in commercial real estate, in residential real estate,” Florence said.
Florence has said he has no intention of making Matterport’s features exclusive to real estate professionals using Homes.com.
“We’re going to provide it to anyone. Everybody,” Florance said. “What we’re doing is Homes Pro members, we’ll just Matterport their listings and generate floor plans. But anyone that wants to do Matterport, that’s fantastic. We think we win by jumpstarting demand, by putting Matterport up on homes.”
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