Nigel Eccles, who started FanDuel and used to run it, wants a New York court to stop his old company from making him go to arbitration. This is the latest part of a legal battle that has been going on for years about selling the sports betting company in 2018.
Eccles Accuses FanDuel of Dodging Shareholder Lawsuit
In a motion submitted to the New York State Supreme Court, Eccles asked the court to issue a temporary restraining order against FanDuel. He claims the company’s push for arbitration serves as a deliberate distraction to avoid the main lawsuit. This lawsuit aims to recover payouts that plaintiffs say FanDuel held back from early stakeholders during its sale to Paddy Power Betfair, now known as Flutter Entertainment.
On March 31, FanDuel started arbitration proceedings against Eccles. The company alleges he broke the terms of a 2017 separation agreement. FanDuel says Eccles violated this contract by helping others involved in the ongoing shareholder lawsuit. The company wants Eccles to give back about $8 million it paid him under the original agreement.
In response, Eccles and his lawyers argue that FanDuel wants to delay things. They say this is to avoid a judge looking at what the original shareholders claim. They point out that FanDuel did not try to enforce the supposed breach for more than seven years. During this time, FanDuel kept paying under the same deal. They say FanDuel wants arbitration now because the shareholder case is picking up steam.
Lawsuit Alleges FanDuel’s 2018 Sale Was Rigged to Favor Private Equity Firms
The main issue is about how much FanDuel was worth when it joined with Paddy Power Betfair in 2018. Eccles and other early shareholders say the company’s value was made too low on purpose. They claim this let preferred shareholders — private equity firms like KKR and Shamrock Capital Advisors — get all the equity in the new combined company. Meanwhile regular shareholders got nothing.
This argument got stronger after the New York Court of Appeals decided in 2024 that Eccles and other plaintiffs had enough evidence to claim breaches of fiduciary duty under Scots law. Scots law applied because FanDuel was first set up in Scotland. The court recognized that some directors might have had special fiduciary duties to shareholders given the unique setup of the merger and share structure.
Eccles insists that his 2017 agreement never stopped him from taking legal action about future events. He stresses that he is part of this current case to help over 100 early employees and investors get fair treatment. These people believe they missed out on the financial benefits of FanDuel’s later success.
FanDuel and its private equity backers have not said anything about the newest filing. The lawsuit goes on in New York where Eccles and other plaintiffs want compensation and payback for what they claim was a planned effort to take away their fair share.