In June 2012, AOL sold the Bebo social network to Criterion Capital Partners. About six months later, Entrepreneur Richard Hecker, TV executive Michael Jackson, Ron Conway’s SV Angel Investmets, and Michael and Xochi Birch of MXB Holdings (also Bebo co-founders), invested in Bebo hoping to revive new life and new directions into the platform. One thing that is important to remember here is that Bebo was originally sold to AOL for over $850 million in 2008.

Now, as PaidContent.Com has reported, the four major shareholders named above are filing a lawsuit against Criterion Capital Partners and Bebo CEO Adam Levin. They are seeking $5 million in damages. They have a number of allegations to substantiate their suit:

* Criterion has exploited Bebo and stole money from shareholders to pay Levin’s $14,000 per month salary along with other members of the staff.

* Criterion has been hiding the operational and financial details of Bebo from the investors and stakeholders.

* After almost two years in business under Criterion ,Bebo has failed to organize a single shareholder or board meeting.

* Defamation of Bebo’s reputation through failure to answer lawsuits and failure to pay on the lease agreement where they entity was headquartered.

A pretrial hearing for the case is scheduled for August 8th in San Francisco, but Criterion has yet to have filed a response to the allegations with the court.