On June 30, 2010, Paul Ceglia, the owner of a wood pellet fuel company in New York, filed a lawsuit against Zuckerberg, claiming 84% ownership of Facebook and seeking monetary damages. According to Paul, he and Zuckerberg signed a contract on April 28, 2003, that an initial fee of $1,000 entitled Ceglia to 50% of the website's revenue, as well as an additional 1% interest in the business per day after January 1, 2004, until website completion.Mark Zuckerberg was developing other projects at the time, among which was Facemash, the predecessor of Facebook, but did not register the domain name the facebook.com until January 1, 2004. Facebook management dismissed the lawsuit as "completely frivolous". Facebook spokesman Barry Schnitt told a reporter that Ceglia's counsel had unsuccessfully sought an out-of-court settlement.
Pursuant to the contract, Ceglia agreed to pay Zuckerberg $1,000 for StreetFax and $1,000 for PageBook. The contract also refers to The Face Book, a project that was to be completed by January 2004. Ceglia offered a receipt for $1,000, dated six months after the contract, to prove he paid Zuckerberg, but it was not the full amount due, and the contract did not specify what occurs in the event of a default.
In an interview with ABC World News, Zuckerberg stated he was confident he had never signed such an agreement. At the time, Zuckerberg worked for Ceglia as a code developer on a project named "StreetFax". Judge Thomas Brown issued a restraining order on all financial transfers concerning ownership of Facebook until further notice; in response, Facebook removed the case to federal court and asked that the state court injunction be dissolved. According to Facebook, the injunction would not affect their business and lacked any legal basis.
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