A $465.5 million merger, an $11.2 billion exit, and a discovery order
FanDuel co-founder Nigel Eccles and more than 100 other shareholders are back in court over the 2018 deal they say left them with nothing, and this week they got their first procedural opening in years. As GamblingNews first reported, Special Master Alan Scheinkman has ordered defendants including KKR and Shamrock Capital to hand over previously withheld legal communications for confidential review.
The order is narrow. It covers only documents touching three subjects: FanDuel’s valuation in the 2018 merger, the private equity firms’ drag-along rights, and the waterfall provision that fixed the sequence in which merger proceeds were paid out. Scheinkman also turned aside the argument that papers are shielded from disclosure simply because the defendants expected litigation. He took no position on whether the case has substance, which the defendants contest.
The numbers plaintiffs say were engineered against them
The story begins with the 2018 merger of FanDuel and Paddy Power Betfair’s US operations, now part of Flutter Entertainment. Under the deal terms as reported, FanDuel’s ordinary shareholders were initially entitled to roughly 40 percent of the combined business. That entitlement never materialized, because the merger consideration was valued at $465.5 million, below the $559 million threshold owed to preferred shareholders before ordinary shareholders could receive anything. The waterfall provision did the rest: preferred holders were paid first, and there was nothing left for anyone behind them.
Two years later, in 2020, Flutter Entertainment bought out the private equity firms’ FanDuel holdings, and the price paid valued the whole company at $11.2 billion. That is the gap at the heart of the claim: a company priced at $465.5 million in a merger to ordinary shareholders, and at $11.2 billion when those holdings changed hands again. Eccles and the other plaintiffs say the difference is the value that was taken from them.
The first version of the suit, filed in the New York Supreme Court, New York’s trial-level court, was dismissed in 2022. The second suit entered the court in the summer of 2026, and Scheinkman’s order is its first significant step.
Why the discovery order matters more than it looks
Discovery is where cases like this are decided. The 2026 suit can only get to a valuation fight if it can see the documents behind the 2018 merger: the fairness analysis, the negotiations over drag-along rights, the drafting of the waterfall. By ordering confidential review of withheld communications on exactly those three subjects, the special master has aimed discovery at the mechanical heart of the alleged wipeout rather than letting privilege claims wall it off.
Two of the ruling’s determinations stand out for anyone tracking founder-versus-private-equity litigation. The first is that expecting a dispute was not, by itself, enough to keep documents private: a general anticipation of litigation did not put the papers behind a shield. The second is the choice of law. Scheinkman held that Scots law governs every attorney-client privilege question, because FanDuel was registered in Scotland at the time of the merger and the claims rest on arrangements made under that company’s charter. That is an unusual wrinkle in a New York proceeding, and it could shape how much of the paper trail survives a privilege fight.
The order is also bounded. Reviewed documents are not automatically disclosed to plaintiffs; the defendants will determine which, if any, individual documents must be handed over. Confidential review is an intermediate step, not an outcome.
When he is not analysing the latest compliance updates or dissecting quarterly operator results, Florian follows Bundesliga football closely and maintains a healthy skepticism toward anyone claiming to have cracked a winning betting system. He brings a grounded, insider-aware perspective to his writing and is always more interested in the structural story behind the headline than the headline itself.