The fate of the company and the conclusion of the lawsuit could affect the broader media ecosystem. OpenWeb works with more than 3,000 publishers including CNN, The Wall Street Journal, NewsCorp., Yahoo, and Fox News. These publishers generate revenue, as well as on-site engagement, through their relationship with OpenWeb, which could be jeopardized if the company experienced a leadership crisis.
Shoval’s ouster and subsequent lawsuit
According to the lawsuit, the controversy began this summer when OpenWeb’s board of directors made several changes to Shoval’s role as CEO, including a shift that required Shoval to report to the chairman of the board, rather than the board.
Shoval objected to the change, which he said hindered his management capabilities, and he submitted an official objection on Sept. 5.
The board then used this note of objection as a pretext to oust him by interpreting it as a letter of resignation, Shoval alleges in the court documents. However, Shoval disputed that interpretation, pointing to language in the note that states, “For the avoidance of doubt, this notice is not a resignation from my employment with the company.”
In the lawsuit, Shoval alleges that the directors were motivated by a desire to serve the shareholders that appointed them—the venture capital firms Insight Ventures and Georgian—rather than honoring their obligations to OpenWeb.
“The decision to dismiss [Nadav] and the appointment of a temporary CEO are part of a scheme to remove him from the company, with the aim of acquiring his shares at a low price,” according to the lawsuit.
As part of the legal action, Shoval requested to remove two of the board members he appointed—Omer Cygler, a managing partner at Lion Investment Partners, and Scott Galloway, the marketing professor and entrepreneur—and replace them with Ron Zuri and Mark Frons.
He also requested that any decision made after his controversial ousting be undone, effectively rewinding any action or decision undertaken by the executive team.
The injunction that Shoval won from Judge Zimmerman prevents the board from taking any further action until the Oct. 28 hearing.