LOS ANGELES, June 20, 2019 /PRNewswire/ -- Law firm Pierce Bainbridge Beck Price & Hecht LLP announced today that its client, Advsr, LLC has filed a lawsuit in the U.S. District Court for the Northern District of California against Magisto, Ltd. for, among other claims, breach of contract, fraud, and unjust enrichment. The lawsuit alleges that Magisto flagrantly attempted to avoid its obligations to pay Advsr for the advisory services provided in support of Magisto's acquisition by Vimeo, the IAC-owned streamed video platform.
Advsr asserts that, pursuant to the terms of an engagement agreement the parties entered into in May 2017, the company, an experienced M&A advisor that assists startups in seeking strategic partnerships or acquirers, introduced Magisto to IAC/Vimeo and took the lead role in Magisto's pursuit of an acquisition. The lawsuit further asserts that Advsr's extensive services, which were provided on a contingent basis and were repeatedly requested by Magisto, culminated in an offer and framework for IAC/Vimeo's acquisition of Magisto in late September 2018. Magisto recently announced that the acquisition closed in May.
According to the complaint, under the engagement agreement, Magisto owes Advsr compensation based on the reportedly $200 million sale price. The lawsuit alleges that despite the significant support Magisto requested and received from Advsr, Magisto offered no compensation to Advsr for the highly successful outcome. In fact, Advsr claims it later learned that Magisto's management had not even informed the board of directors of Magisto's requests during the tail period that Advsr continue its efforts to accomplish the IAC/Vimeo acquisition and Magisto's promise to pay Advsr for those services.
According to Pierce Bainbridge partner Andrew Lorin, "Our client Advsr, at the repeated request of Magisto's management, provided substantial services in order to create and effect Magisto's highly desirable acquisition by IAC/Vimeo. Despite Advsr's critical role in achieving this excellent result, Magisto blatantly refuses to honor its obligation to pay Advsr, forcing our client to pursue its rightful compensation through litigation."
Advsr seeks, among other forms of relief, compensatory and punitive damages and a declaration that Magisto is obligated to pay all fees owed to Advsr under the engagement agreement.