Journalists and members of the public take note: What you read in a legal complaint isn’t necessarily “fact.” Savvy attorneys use legal claims as leverage, and sometimes will write negative things their clients don’t really mean — in an attempt to muscle the other party into a favorable settlement or other deal.
Such seems to have been the case for one-click checkout star Bolt and one of its top clients, Authentic Brands Group. ABG, which owns more than 30 consumer and retail brands including Forever 21, Brooks Brothers and Lucky Brand, filed a lawsuit against Bolt earlier this year alleging that it “utterly failed to deliver on the technology capabilities it held itself out as possessing” and created myriad problems for the company.
In the bitter dispute, the mall brand owner claimed that Bolt had breached confidentiality provisions, fell way behind schedule in deploying new technology, didn’t always work well with third-party apps such as buy-now-pay-later app Klarna, and it “enraged customers” with a “disastrous” Forever 21 mobile app rollout. And, oh yeah — it also wanted a $500 million equity stake in Bolt it claims it was promised but didn’t receive.
Bolt countered that the suit was mostly hot air, and that what ABG was really after was the equity stake. (You may know of Bolt because its founder and former CEO Ryan Breslow, 28, did some flamboyant tweeting in January accusing Silicon Valley players of acting like “mob bosses.” But that isn’t really relevant to the legal fight.)
Well, now all of that is water under the bridge. Bolt and ABG executives released a statement yesterday asserting that the lawsuit had been settled and would be dismissed. Along with that, the top executives of both companies said very nice things about each other’s businesses.
"ABG has always prided itself on working with best-in-class partners to build a sustainable and scalable business with a laser focus on digital innovation and ecommerce. That's why we chose to work with Bolt to deploy its exceptional checkout technology to several of our portfolio brands," said Jamie Salter, founder, chairman and CEO of ABG.
Maju Kuruvilla, CEO of Bolt, added that the one-click checkout company continues to be a “proud partner of ABG.”
“Today marks a new chapter in our partnership with ABG and I’ve never felt more confident — together the future is ours,” Kuruvilla said.
Although the exact terms of the settlement were not made public, the statement indicates that ABG got at least some of the equity stake it was after by noting that the retail brand owner will now become a “Bolt shareholder.” (Axios, however, reported that it was a less than 1% stake — much less than what ABG initially wanted.)
There may be other external factors at play in the decision to bury the hatchet. Given that the economy appears to be headed toward a recession, and things are looking especially ugly for both retail and tech, the two companies may have decided that patching up their partnership would enable them to better withstand future headwinds.
Whatever the reasons may be, we hope the rekindled alliance will lead to a more prosperous future for ABG, Bolt and their investors.