Snopes, the fact-checking website, is asking readers for donations to raise the money it needs to survive. Bardav, the company that owns and operates Snopes, has created a crowdfunding page seeking $500,000 from readers to continue operating indefinitely. The company is currently locked in a legal battle that it says has drained its finances.
The Snopes website once focused on debunking flimsy internet rumors. In recent years, it has widened its focus to calling out political leaders for dishonesty. At first run entirely by David and Barbara Mikkelson, the website has expanded over the years into a 16-person operation. The site currently gets all of its revenue from advertising.
The company claims that Proper Media, the vendor running its advertising services, has withheld the site’s revenue and has refused to relinquish control of the site. Mr. Mikkelson said in an interview, “We have had no income whatsoever for the last several months.”
The two sides have sued each other in separate claims. In March, Bardav gave Proper Media a 60-day notice that it would be terminating the contract, effective May 8. Proper Media then sued Mr. Mikkelson in May, accusing him of mismanaging the company’s funds and abusing his position.
Legal clarity on the underlying structure of the company is at the heart of the dispute. Ms. Mikkelson sold her 50 percent share of the company in 2016 to individual members of Proper Media for tax purposes. Two Proper Media officers, Drew Schoentrup and Christopher Richmond, got 20 percent stakes in Bardav, while three others got 3.33 percent stakes.
Proper Media now considers itself an owner of Bardav, not a vendor. Proper Media says the shares were bought “for the benefit of Proper Media,” giving Proper Media equal ownership. According to Proper Media, Mr. Schoentrup also took a seat on a two-person board alongside Mr. Mikkelson.
Mr. Mikkelson, who owns the other 50 percent of the Bardav shares, said that the five shareholders should be viewed individually, not collectively. Karl Kronenberger, a lawyer for Proper Media, said that he cannot cancel the contract without calling a board meeting. Mr. Mikkelson claims that Mr. Schoentrup does not sit on the board. The company has continued as if the contract remained valid.
A court hearing scheduled for Aug. 4 may be the earliest chance for resolution. Proper Media and its lawyers say that Snopes employees will continue to be paid from the advertising revenue. Last week, the sides agreed that Proper Media would release $100,000 of the advertising revenues to Bardav, on the condition that the money be used for expenses.