The Court of Appeal for Ontario dismissed an appeal by Toronto-based venture capital firm Extreme Venture Partners (EVP), which was seeking compensation for the management buyout of Xtreme Labs. EVP alleged the valuation for the company, which held a stake in Tinder, was based on a “significantly undervalued” price, resulting in it taking a loss on the deal. Social Capital CEO Chamath Palihapitiya and prominent Toronto venture capitalists Amar Varma and Sundeep “Sunny” Madra had won summary judgment from the Superior Court of Justice in October 2018 dismissing the case. The court of appeal declined EVP’s attempt to appeal that ruling, ordering it to pay $10,000 for the opposing side’s costs. Legal counsel for EVP did not immediately respond to a request for comment; counsel for Madra and Varma declined to comment. (The Logic)

Talking point: These same litigants are part of a larger lawsuit around the 2012 sale of Xtreme Labs. Earlier in May, The Logic broke the news that Palihapitiya, Varma and Madra were ordered to pay US$15.69 million by the Ontario Superior Court of Justice in that case, which centres on the sales of Xtreme Labs; this case focused on the valuation leading up to that sale. The court of appeal’s decision centred on whether Palihapitiya, Varma and Madra had any “duty of care” to EVP when the valuation for Xtreme Labs was put together. In other words: the judges didn’t have to rule on whether or not Xtreme Labs was undervalued because Palihapitiya, Varma and Madra had no legal obligation to value it properly. The US$15.69-million ruling focused on more fundamental questions. The judge in that case found that Palihapitiya, Varma and Madra had engaged in “conspiracy” and “unlawful conduct.” The latter two intend to appeal.