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Skype Founders’ New Court Filings Include ‘Smoking Gun’ E-Mails From Ex Joost CEO

[With Staci D. Kramer] For weeks, Skype founders Niklas Zennstrom and Janus Friis have claimed in legal filings and through representatives to have evidence that former Joost CEO Michelangelo “Mike” Volpi put together an investment group to acquire the virtual phone company by promising access to a technology workaround. Now they’ve filed a variety of documents, including excerpts of e-mails, that they say back up those accusations, including that that Volpi tried to lure a top engineer away and was working with Index Ventures to acquire Skype while still CEO of Joost, which they also founded.

Index responds: Until now, Volpi and Index have declined comment. But Index issued a statement Wednesday through a just-hired PR firm: “This filing reflects a continued series of public attacks that are guided by personal agendas rather than substantive legal fact. We will continue to counter this transparent agenda aggressively in the court system.”

A little backstory: Zennstrom and Friis are suing all of the investors involved in the $1.9 billion (£1.18 billion) deal to buy a majority of Skype from eBay, including Volpi and Index Ventures. They also filed a separate suit on Sept. 18 through their Joost and Joltid companies against Volpi personally. They contend that the investment group led by Silverlake Partners only put up the money to acquire the majority of Skype because Volpi promised a way around Skype’s biggest problem: it’s built on P2P technology (Global Index) owned by Joltid, which is the subject of another, ongoing litigation between Skype and Joltid. If Skype loses that case without the fallback they say Volpi promised — and that he has only because he insisted on switching Joost from P2P to off-the-server video distribution — they claim it will be worthless. The pair also contend that Volpi burned through cash and caused Joost to fail. (More details here.)

This batch of filings, first posted by Kara at AllThingsD, comes about in part because of the change in venue of the most personal suit, from Delaware Chancery Court to U.S. District Court there, and repeats the original claims and the demand for a preliminary injunction — but also adds Index Ventures as a defendant. Index backed Zennstrom and Friis in both Skype and Joost.

Project Anthill: The brief to support the request for a preliminary injunction outlines Project Anthill, a top-secret move supposedly to transform Joost from desktop app to in-browser and from P2P to central server by altering the Global Index source code. Joost had full access to source code; Joltid claims Skype does not. The suit claims Volpi had full access to the secret project, including all the engineering, and that his comprehension was high enough to “participate” at a detailed level.

Smoking gun?: The brief, which has been redacted, contains reference to e-mails dating back to Feb. 23 — less than five months before Volpi left Joost — to Index exec Danny Rimer. The actual e-mails are included as exhibits. In the Feb. 23 e-mail, Volpi writes of a “business concept” where Index would buy a majority stake in Skype for $1 billion, install him as chairman and replace its P2P technology with a SIP (session interface protocol) platform. He offers to recruit Cisco’s Jonathan Rosenberg, the “father of SIP.” He then says Index could then “cut costs and clean up staff while private.” In one e-mail, the suit claims, he tells Rimer of a meeting with eBay’s John Donahoe in which he advised him Skype would need to replace the Joltid GI, then tells Donahoe, “I think I can lend a lot of support to an alternative path for the Skype unit.” Other e-mails show him signing on with Silver Lake as a consultant and agreeing to an NDA with eBay (NSDQ: EBAY).

Employee raiding?: One filing contains testimony from Joost’s chief architect Justin Erenkranzt, who recounts meeting Volpi in July and hearing of his plans to buy Skype and remove its P2P technology, which is based on the GI Software owned by Friis and Zennstrom’s Joltid company. Erenkranzt alleges Volpi told him that “a workaround (on the GI Software) would need to be performed — similar to the workaround by… Joost”.Another, from Joost CFO Owen O’Donnell says Volpi failed to act when told in Q408 that the company would soon run out of cash; O’Donnell also claims the company’s board was concerned by his decision to handle attempts to sell Joost himself and not to appoint a consultant.

Here are the key court filings:

Here are the key court filings:

Pi Brief – Public

Declaration of Janus Friis Degnbol in Support of PI

Declaration of S. Dargitz in Support of PI – PUBLIC

Exhibits 1-20 to Declaration of S. Dargitz in Support of PI – PUBLIC

One Response to “Skype Founders’ New Court Filings Include ‘Smoking Gun’ E-Mails From Ex Joost CEO”

  1. What a complete mess. No serious person would think about getting involved with these baffoons until all this clears up because it smells really bad and it's hard to decipher villain from hero.