TinBu founders John Brier and Bin Tu have filed a lawsuit saying that Lottery.com refused to pay them promised compensation after the company was bought.
According to the lawsuit, Lottery.com - then known as AutoLotto Inc. - approached the TinBu founders in 2017 about a prospective takeover of the company.
According to the lawsuit, the two parties reached a written agreement in 2018 under which Brier and Tu were to receive millions of dollars in cash, a number of cryptocurrency token investments in AutoLotto, and a guaranteed five-year employment contract to continue working for the combined entity after the merger.
According to the plaintiffs, who are represented by Morgan & Morgan, Lottery.com failed to make the first of several promised payments after the contract was closed. They further claimed that the company failed to produce the promised tokens, rendering that portion of the contract null and void.
“Our clients built a business from the ground up, but instead of being rewarded for their hard work, they had their company essentially stolen out from under them,” read a statement from the plaintiff’s lawyers John Morgan, Roger Brown and Benjamin Webster. “We hope to recover what Mr. Brier and Mr. Tu are owed and hold other companies like this accountable.”
Following a number of attempts to resolve the case through updated agreements, which Lottery.com is also accused of failing to honour, the two sides eventually agreed to a new settlement and employee agreements.
The action also claims that Lottery.com continued to break its contract, owing Brier and Tu more than $10 million despite the fact that the acquisition was years ago and Lottery.com had utilised the firm to seek new investment.
The suit also mentions Lottery.com's more recent problems, claiming that the corporation deceived them and other investors by making "material misrepresentations" about the company's financial situation. This dates back to before the company's initial public offering in November 2021.
The action names former business president, treasurer, and chief financial officer Ryan Dickinson, as well as former chief revenue officer and director Matt Cleminson, in addition to the TinBu subsidiary and Lottery.com.
These defendants, according to Brier and Tu, had the authority to control the contents of the company's SEC filings, news releases, and other market communication.
“Because of their positions with Lottery.com, and their access to material information available to them but not to the public, the individual defendants knew that the adverse facts specified herein had not been disclosed to and were being concealed from plaintiffs, and that the positive representations being made were then materially false and misleading,” reads the suit.
The inside scoop
The document also includes charges concerning a number of previous occurrences in which Lottery.com admitted to deficiencies in its financial records and accounting. On July 15, the company said in an SEC filing that Cleminson had resigned effective immediately, and that an internal investigation had revealed that the company had inflated its cash balance by $30 million.
According to the lawsuit, the plaintiffs found after the fact that the erroneously claimed balance was the result of a scheme coordinated by Cleminson in which he arranged for the money to be temporarily deposited in the account in order to mislead auditors.
By fLEXI tEAM