Avi Dorfman, who says he’s a co-founder of Compass, has been fighting for a $200 million stake in the firm for five years. Now, a jury will decide if he’s entitled to it.
In an Oct. 1 ruling, a New York judge denied the SoftBank-backed firm’s motion for summary judgment, and said Dorfman is entitled to a jury trial. He may also be in line for monetary damages related to his claims that he helped CEO Robert Reffkin work on a concept for Compass but was later cut out of the action.
“The record is clear that they exchanged, among other things, emails that set forth offers and counteroffers as to how Dorfman would be compensated as a ‘founding team member’ of the new venture,” Supreme Court Judge Andrea Masley wrote, ordering a trial date to be set within 30 days.
“We are excited for the opportunity to tell Avi Dorfman and RentJolt’s story to a Manhattan jury soon,” Steve Susman, Dorfman’s legal representative, said in a statement to The Real Deal. (Dorfman claims he was offered a stake in Compass, plus a salary, in exchange for Reffkin’s purchase of his venture RentJolt. The deal never transpired.)
Compass declined to comment. But it previously argued that Dorfman “spurned multiple offers” to work at Compass only to file an “opportunistic” lawsuit against the firm.
“Dorfman now seeks a do-over of that decision, claiming he should be awarded tens of millions of dollars in equity in Compass far in excess of what he could have earned if he had actually chosen to join that venture,” Compass said in its motion for summary judgment.
In legal filings, however, Dorfman claims he developed a 120-day plan to launch the company that would later become Compass; supplied Reffkin with information to present to investors; provided competitive information about other real estate companies; and recruited Chairman Ori Allon, among other things.
“Dorfman has submitted enough proof to show that he provided these types of services that went beyond the negotiation of a business opportunity,” Masley wrote.
Dorfman sued in 2014, claiming Reffkin used a business concept they worked on together in 2012 as the basis for Compass. At the time, Compass was valued at $360 million after raising a $40 million Series B round. This July, Compass’ valuation reached $6.4 billion, after raising a $370 million Series G.
Although the original suit did not specify damages, a lawyer for Compass inadvertently disclosed Dorfman’s monetary claim — that he’s entitled to a 15 percent stake of the company at founding — during a hearing last year. Using back-of-the-napkin math, sources said Dorfman would stand to collect around $200 million.
In 2016, the Manhattan Supreme Court ruled that Dorfman could continue to call himself a co-founder of Compass.