A New York court blocks the social networking site from transferring assets after a man claims he owns 84% of the company.

Posted by UFO360 on Tuesday, July 13, 2010 12:11 PM

A New York judge issued a temporary restraining order against the social networking site Facebook after a New York man sued the company, claiming he owns an 84% stake in it.

Paul Ceglia filed a suit in the Supreme Court of New York's Allegany County on June 30, claiming that a 2003 contract he signed with Facebook founder and chief executive Mark Zuckerberg entitles him to ownership of the company and monetary damages.

Ceglia claims that he signed a contract with Zuckerberg on April 28, 2003, and that he paid $1,000 to develop and design a Web site in exchange for a 50% stake in the product.

The contract stipulated that Ceglia would get an additional 1% interest in the business for every day after Jan. 1, 2004, until it was completed. The project was finished 34 days late.

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"We believe this suit is completely frivolous, and we will fight it vigorously," Facebook said in a statement. Facebook has asked that the suit be moved to federal court from the Allegany County State Supreme Court.

Facebook also said that the statute of limitations would likely prevent the case from moving forward.

In 2009, New York Attorney General Andrew Cuomo accused Ceglia of defrauding customers of his wood-pellet fuel company, The Wall Street Journal reported, citing a news release from the attorney general's office. That case is ongoing.

Zuckerberg started Facebook six years ago when he was a student at Harvard University. It is the the world's most popular social network, with nearly 500 million members.