Facebook sued over ownership

A web designer in New York is suing Facebook for up to $9.2 billion US over a contract he says gives him 84-per-cent ownership of the company.

In a statement of claim filed in the Supreme Court of the State of New York, Paul Ceglia said he had signed adeal with Facebook chief executive Mark Zuckerberg in April 2003 that gave the web designer $1,000 plus 50-per-cent ownershiptocreateThefacebook.com, the precursor to the now massively popular social-networking site.

The contract also gave Ceglia "an additional one-per-centinterest in the business for every day after Jan. 1, 2004, until it was completed," which ended up amounting to an 84-per-cent stake, the lawsuit said.

Facebook, which has nearly 500 million members worldwide,is estimated to be worth between $6.5 billion and$11 billion, which would value Ceglia'salleged stake between $5.4 billion and $9.2 billion.

A judge has issued a temporary restraining order preventing the transfer of any of Facebook's assets.

The company, based in Palo Alto, Calif., has denied the accusations and said Ceglia's lawsuit is frivolous.

Ceglia has had previous dealings with New York courts, according to the Wall Street Journal. In 2009,state Attorney General Andrew Cuomo issued a temporary restraining order againsthis company, Allegany Pellets, for taking payments from customers without delivering products. The company sold wood pellets used for heating homes.

Facebook has also previously been attacked by individuals who said they contributed to the site's success without being properly compensated. In 2007, a trio of Zuckerberg's Harvard classmates took legal action against Facebook for allegedly using their software code and business plan. An agreement was reached in 2008 that gave the plaintiffs $65 million in stock and cash.