Facebook founder Mark Zuckerberg’s bitter battle

February 11, 2015 4:48 pm

The email was blunt: had no interest in playing nice
with the guy from next door.”How do we make this go away?” a Zuckerberg
adviser wrote to his real estate agent. “MZ is not going to take a
meeting with him … ever.”
Now that 2013 email, and others like
it, are at the centre of property war gone rogue. On one side is
Zuckerberg, the billionaire founder of . On the other is the
businessman from next door, a real estate developer who hoped to profit
from Zuckerberg’s desire for privacy.
This is no back-fence
squabble over who trims the tree. The story laid out in court documents
shows how Silicon Valley’s power elite fends off those seeking to force
their way into the club and share the wealth.

Mark Zuckerberg’s multi-million home in Palo Alto California, with
(inset) a window that would have been overlooked.Pictures / Supplied

At its heart are
themes that have been with Zuckerberg since Facebook’s inception, and
that were popularised in The Social Network, the fictionalised film look
at the hoodied man-boy behind the company: brass-knuckle tactics,
bravura performances, whiffs of betrayal.

Only this time, the fuss is over his property in a once-ordinary Northern California subdivision.
Developer
Mircea Voskerician says Zuckerberg broke his word. Zuckerberg’s lawyers
say that’s nonsense, and that Voskerician is trying to squeeze money
out of a billionaire.
The facts, in a nutshell, are these: In
November 2012, Voskerician was in a contract to buy the property behind
Zuckerberg’s home in Palo Alto, California. He sent a letter to the
Facebook chief executive officer saying he planned to tear down the home
and build an 892sq m replacement. It would overlook the back of the
Zuckerberg abode, a view that would include the master bedroom.
Then
Voskerician made an unusual offer. Calling himself a “good neighbour”,
he proposed to sell Zuckerberg a slice of the property at “100 per cent
premium” to give him more privacy.
Within two weeks, they agreed that Zuckerberg would buy the entire property at what Voskerician considered a steep discount.
Why
would Voskerician do that? This is where the two sides disagree.
Voskerician, in court filings, says Zuckerberg promised to introduce him
to contacts in Silicon Valley, a valuable endorsement for anyone.
Nothing was put in writing.
Zuckerberg’s lawyers deny that, and
all of Voskerician’s claims. Whatever the case, the developer sued and
unless the two sides reach a deal the case will go to trial. If
Voskerician wins, he might get the property back.
The emails that
have emerged during litigation offer a glimpse into Zuckerberg’s
private universe. And it’s clear from the start that his inner circle
was livid about their boss’s enterprising neighbour.
In one
email, a financial adviser to Zuckerberg, Divesh Makan, called
Voskerician’s offer an “obscene proposal”. In another, Zuckerberg’s
then-personal assistant, Anikka Fragodt, wrote, “This type of behaviour
makes me want to punch people in the face.”
Zuckerberg’s wife,
Priscilla Chan, lamented, “It’s stuff like this that makes me so sad and
angry.” She asked whether Makan could quietly figure out if the couple
could buy Voskerician’s entire section.
Zuckerberg’s lawyers, in
court filings, say the developer employed “extortive” tactics. They
cited a November 28, 2012 email that Voskerician sent to his real estate
agent in which he suggested the Facebook chief had a chance to buy some
privacy.
If “Mark plans to live there long term”, Voskerician wrote, he has “one shot to ensure his privacy is where it needs to be”.
He
goes on to say the new home would be built “overlooking his
backyard/master bedroom”. Emails from Voskerician show how much he
wanted to gain entry to the rarefied realms of Zuckerberg’s world.
In an April 13, 2013 email to Zuckerberg, Voskerician asked to “shake hands” on the deal and begin the introductions.
“Mr
Zuckerberg, First I am happy that I could maintain your privacy by
selling you the Hamilton property,” the Romanian-born Voskerician wrote.
“Second,
I wanted to meet and shake hands for the transaction and discuss your
offering of working with you in the future as you stated you have built
Facebook on connections that you have with others in Silicon Valley.
One
of the reasons I went with your offer other than maintaining your
privacy was your offering to help me get my homes, development projects,
in front of your Facebook employees and build a relationship with you.”
Voskerician
also asked for a 30-minute meeting with Zuckerberg to discuss a project
involving “modern science-based sustainable social living” using an an
“open source” model akin to Facebook’s “Open Compute Platform”. Emails
suggest the Zuckerberg team had zero interest.
Makan told Zuckerberg’s real estate agent the Facebook chief was unlikely to meet Voskerician at all.
“But
if it means I have to waste 30 min on MZ’s behalf I would grudgingly do
it if you advised this,” he wrote in an April 2013 email.
Voskerician kept nudging, to no avail. By November 2013, Facebook employees were starting to worry he could cause problems.
Zuckerberg’s
assistant, Andrea Besmehn, briefed the company’s head of executive
protection in case the standoff “escalates from either a security or PR
standpoint”.
Besmehn sent an email later that day on which the
case could now turn: “I just had a quick chat with Mark on this issue –
and he said he does remember saying that he would help this guy in a
‘light’ way,” Besmehn wrote to Makan and others.
“Is there a way
when we chat with him that we can find out a way for us (not necessarily
Mark) to help him with something small? Also … we’ll have to manage
this carefully because we don’t want to give an inch …”
Voskerician’s
lawyer, David Draper, declined to comment on the complaint, which
includes allegations of fraud, breach of contract and misrepresentation.
Zuckerberg denied all the allegations in an October court filing.
While
verbal promises can be difficult to pin down, Voskerician’s claim that
he had an agreement stands a good chance of being used as evidence, said
Saint Louis University law school professor Miriam Cherry.
The
email from Zuckerberg’s assistant saying he recalled agreeing to help
Voskerician in a “light way”, while not a first-hand account, “is still
convincing as to what his state of mind was”, Cherry said.
California had a “loose standard” of letting such understandings be used as evidence.
A
law professor at the University of California at Irvine, David Min,
said the case could come down to whether Voskerician can prove
Zuckerberg made a real promise.
“Oftentimes these can come down to a he-said, she-said face-off,” Min said.
However
the case turns out, Zuckerberg’s privacy is unlikely to be threatened
by other neighbours thanks to Makan, the former Goldman Sachs Group and
Morgan Stanley executive who described his team as “Mark’s family
office”.
As Voskerician pressed his demands more insistently,
Makan’s firm, Iconiq Capital, bought other properties surrounding
Zuckerberg’s home, buying one for US$10.5 million ($14.14 million),
another for US$14 million and a third for US$14.5 million, according to
the Santa Clara County tax assessor’s office. Those prices eclipsed the
assessed value of the properties, which in 2013 were less than US$3.5
million.

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