Acquisitions / Investing / Legal / Startups

Investors’ lawsuit against OrderUp dismissed by judge

A group of angel investors claimed cofounder Chris Jeffrey misled them. A federal judge in New York dismissed the suit Wednesday.

OrderUp's Canton offices. (Courtesy photo)

A federal judge in New York dismissed a lawsuit filed last year that claimed OrderUp and cofounder Chris Jeffrey weren’t straight with early investors about the company’s future before they sold their shares.
U.S. District Judge Kimba M. Wood granted a motion by the online food delivery company to dismiss the suit in its entirety on Wednesday.
Angel investors Charles Lipson, Doug Potolsky, Samuel Cooper and Steve Israel filed the suit in May 2016, alleging that they were misled prior to selling interest in the company. They claimed OrderUp and Jeffrey began planning to sell the company in 2013 without revealing it, and instead warned the investors that their business was being threatened by GrubHub.
In a motion, Jeffrey wrote that the claims amounted to “seller’s remorse.” Wood cited several reasons for dismissing the suit, including an absence of an actionable misrepresentation or damages.
“Plaintiffs are sophisticated parties, who had the opportunity to consult counsel, if they had wished to do so,” Wood wrote in the ruling. “They are investors with business acumen, who invested a collective $850,000 into a small company. The investment transaction was at arm’s length, and there was not a drastic imbalance in sophistication between plaintiff investors and defendants.”
The investors have until April 27 to file an amended complaint if they wish to do so.
OrderUp, which is based in Canton, sold to Groupon for $69 million in 2015.

Companies: OrderUp

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