Entrepreneur Sues Compass, Claims to Be Cofounder
February 21, 2020
An investor is suing Compass to be recognized as the brokerage’s cofounder and claim a stake in the firm. An appellate court judge on Thursday paved the way for Avi Dorfman’s lawsuit to go to trial, dismissing an appeal from Compass in October. The judge said documentary evidence shows that Dorfman appeared to have developed materials to secure financial backing from investors, such as Goldman Sachs, and other relationships as Compass was founded, The Real Deal reports.
In court documents, Compass officials have denied Dorfman was a cofounder of the company and have characterized the lawsuit as opportunistic. The brokerage claims that Dorfman worked with CEO Robert Reffkin and Chairman Ori Allon prior to October 2012. The company was not yet incorporated at that time.
Compass alleges in court documents that Dorfman had several offers to work for the brokerage and is now seeking 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.”
Dorfman first sued Compass in 2014. He alleges that he helped Reffkin develop the concept for Compass but was later shut out. The original lawsuit does not specify damages, but Dorfman’s legal team has estimated that he is entitled to up to 6.91% of Compass equity—or $200 million, according to a 2017 report. Compass is valued at $6.4 billion and is heavily backed by investors, including SoftBank.
Updated: April 03, 2020