WILMINGTON, Del.—FriendFinder Network Inc. and Penthouse are in Delaware’s Chancery Court this week after the former filed suit against the latter, claiming more than a half dozen domains were mistakenly transferred to Penthouse, who now reportedly refuses to transfer them back.
FriendFinder originally filed the lawsuit in Chancery Court—a court authorized to apply principles of equity, not law, to cases—in June, saying eight websites of more than 1,000 sold to Penthouse were transferred though they were not part of a $6.5 million sale of assets to Penthouse. Two of the sites—BookOfSex.com and HornyWife.com—are a major part of the FriendFinder Network brand and help drive traffic to its adult dating and webcam platforms, the suit claims.
According to published reports, FriendFinder CEO Jonathan Buckheit testified in Chancery Court on Wednesday that the mistake was discovered over Memorial Day weekend, after a revenue report shows the sites, specifically BookOfSex.com and HorneyWife.com, were redirecting to Penthouse’s website. Buckheit said Penthouse was made aware of the situation, and began redirecting traffic form the sites back to FriendFinder, but the company still has not returned control of the sites in question to FriendFinder.
The original sale took place this past February, when FriendFinder Networks Inc. (FFN) sold and agreed to transfer all of the shares of the companies comprising FFN's Penthouse enterprise to Penthouse Global Media, Inc. (PGMI).
The original complaint alleged that by not transferring back the sites that were mistakenly transferred over, “PGMI's wrongful exercise of control and dominion over the FFN domains is damaging FFN's relationship with its business affiliates, interfering with FFN's contractual relationship with nearly 50,000 registered members and diverting revenue away from FFN.”
Under cross-examination, according to reports of the case, Buckheit admitted he was not involved in the creation of the list of domains to be transferred to Penthouse.
FriendFinder is asking the court to determine control of the websites in question belongs to FriendFinder and to issue an injunction requiring Penthouse to return control to FriendFinder. FriendFinder also is asking for legal fees and costs of reverting control of the sites.
The trial is scheduled to continue today.
