Color Lawsuit Confirms Sale to Apple

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Details about Color Labs' sale to Apple have emerged in a lawsuit brought by a former employee of Color. The lawsuit shows that Color's technology team and some Color intellectual property were acquired by Apple last month. The Color website now contains the following message:

Alert: We hope you've enjoyed sharing your stories via real-time video. Regretfully, the app will no longer be available after 12/31/2012.

The sale had been rumored as far back as October 18, and was set to bring relief to investors who had seen the mobile broadcasting social app startup struggling to find a place in the mobile market. The price of the sale was rumored at the time to be in the "high double digits," but TechCrunch today reports it has confirmed the sale price was around $7 million. That's far less than the $40 million investors such as venture capital firms Bain Capital Ventures and Sequoia Capital poured into the company.

The lawsuit was brought by Adam Witherspoon, a former Color employee who claims he was intentionally and inexplicably left out of the Apple deal. He is seeking payment for lost wages, lost benefits, and "emotional distress." Witherspoon and his wife were founding employees at Color, with Witherspoon working IT at the company. He now accuses Color founder Bill Nguyen of a variety of gossipy actions, including calling Witherspoon's son a "wimp" and unfriending Witherspoon on Facebook.

The lawsuit as a whole is pretty embarrassing. It paints an unflattering, childish picture of Nguyen, Witherspoon, and the overall culture of Color Labs.

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