Court partially denies Aptos Labs’ motion to dismiss Glazer’s $1 billion lawsuit

5



A judge has partially denied a motion by Aptos Labs CEO Mohammed “Mo” Shaikh to dismiss a lawsuit filed by entrepreneur Shari Glazer, who claims to have been cheated out of equity as an early investor. According to a court transcript published on Oct. 10, fraud and three other legal claims were dismissed by the court, while three others were allowed to proceed, specifically breach of contract, unjust enrichment, and Glazer’s alleged entitlement to 50% of Matonee, parent company of Aptos Labs.

Aptos was founded by former Meta employees Mo Shaikh and Avery Ching. The founders were also involved in Mark Zuckerberg’s failed Diem project. Diem Association and its subsidiaries ceased operations in February, with Meta selling the intellectual property and other assets of the project.

In her decisions, Justice Jennifer Schecter stated that “there is no universe in which the complaint is going to be dismissed,” continuing:

“I just don’t see at this pleading stage how I can find as a matter of law that there is any evidence that completely refutes the existence of an enforceable agreement between these parties; and certainly, there’s no way that she doesn’t have a claim at the very least for unjust enrichment either.”

However, the judge continued on to dismiss a number of the causes of action, stating:

“For the reasons that I stated and after hearing arguments and reading the papers, I am going to dismiss the causes of action other than the ones that I indicated have potentially teeth, numbers one, five and six. That’s for breach of contract, unjust enrichment, and its declaratory judgment in connection with the existence of the contract.”

In March, Glazer and her firm Swoon Capital filed a complaint against Matonee alleging a fraud scheme that deprived her rightful share in the partnership, in this case 50% of Shaik’s share in the business. Glazer demands up to $1 billion in the lawsuit. 

The decision was seen as a positive development by Aptos Labs. A spokesperson from the company told Cointelegraph:

“We are pleased with the court’s ruling in which the majority of Ms. Glazer’s claims were dismissed outright — despite a high legal standard at this phase of litigation that requires giving Ms. Glazer nearly every benefit of the doubt and requires accepting Ms. Glazer’s allegations at face value.”

The company also noted that headlines claiming the motion was denied by the justice are inaccurate: “The judge actually granted Aptos’ motion to dismiss in large part.”

In July, Aptos Labs closed a $150 million funding round to advance its efforts in the Web3 space in a round co-led by FTX Ventures and Jump Crypto, along with Andreessen Horowitz, Apollo, Franklin Templeton and Circle Ventures. The funding round more than doubled the startup’s valuation, which was over $1 billion in March.