Googling Dapper Development lawsuit has probably led you to a lot of conflicting information, as, interestingly, this term describes four different lawsuits between two companies with only the word “Dapper” in common. One is a private North Carolina home builder embroiled in an ownership dispute between those who own it. The other, Dapper Labs, the Canadian blockchain start-up behind NBA Top Shot, has settled two class actions concerning how it harvested user information from its platform to advertise to users, and a third over whether its NFTs are securities that are required to be registered under securities law. We bring to a step-by-step conclusion all four, in simple terms, with sources.
Dapper Development, LLC v. Cordell: The North Carolina Real Estate Lawsuit
This is the one most fittingly titled after the Dapper Development and it has nothing to do with crypto or the NBA.
Dapper Development, LLC builds new homes and renovates and resells single-family homes in North Carolina. Its sister company, Tantalum Holdings, LLC, rents out residential property, mostly in Mecklenburg County. The two companies were owned equally, with each of the four shareholders having a 25% stake, two of whom, Brendan Gelson, Kyle Tudor and Mason Harris, were one side, and Andrew Cordell, the other.
The complaint alleges that the working relationship between the four Co-owners deteriorated, and in June 2023, Gelson, Tudor and Harris voted to terminate their membership interests in both entities, providing Cordell with a cash payment in lieu. Cordell challenged the removal and brought some counterclaims of his own. None of these charges have been established at trial on either side and the case is ongoing.
The lawsuit has been rolled through North Carolina Business Court in stages. In September 2024, the Chief Judge ruled on both motions to dismiss, granting the motions for the most of the core claims. A separate order from 2024 established the guidelines to exchange electronic evidence between the parties. Then, in July, 2025, Judge Brown granted the validity of Cordell’s June, 2023, removal and dismissed several of his counterclaims, but allowed the underlying claims of both parties for a breach of contract to proceed.
As of mid-2026, there is no trial date or final judgment or settlement reported. This is a continuation of civil litigation, none of the following is meant as a determination of fault on the part of any party.
Court Proceedings and Timeline
The Dapper Development case has passed through the North Carolina Business Court with some significant milestones. Subsequently, following failed talks on buyouts in mid-2023, the remaining members voted to boot Andrew Cordell out of the LLCs. Court documents indicate that the other co-owners voted majority in June 2023 to end the membership and management position of Cordell according to the operating agreements. Cordell had filed his own suit against them on grounds that his own rights were infringed but he then voluntarily dismissed the action. In April 2024, the other owners resubmitted their action against Cordell claiming infringement of the contract and other allegations.
The next business court decisions were on the sufficiency of the pleadings complaints and counterclaims to proceed. As an example, the North Carolina Business Court (Chief Judge Bledsoe) passed a case of Dapper Dev., L.L.C. v. Cordell, 2024 NCBC 63, on September 25, 2024. The court refused to grant Cordell a motion to dismiss the complaint filed by plaintiffs. It determined that the plaintiffs had sufficiently claimed breach of contract and other claims. Specifically, this court ruled that it would be unacceptable to reject a valid buyout offer and freeze company funds due to a breach of contract in the operating agreement. The judge ruled that the allegations made by the plaintiffs satisfied the low standard of notice pleading and therefore the case had a chance to go to discovery and litigation.
The other important decision was passed in July 2025 (Dapper Dev., L.L.C. v. Cordell, 2025 NCBC 33). Cross-motions on different claims were then heard by Judge Brown. Key outcomes included:
- The court upheld the fact that Cordell had been rightly displaced as a member and manager in the operating agreements. The court ruled that Cordell did not remain a member of the LLC because a majority vote had been taken in June 2023. This also implied that he was no longer a manager as all members were also managers by contract.
- The court permitted the main breach-of-contract claims to live through. It believed that allegations of breaches upon Cordell part were not sufficiently specific to be dismissed, but that the claims against him on the part of the plaintiffs were sufficient in their pleading. That is, the judge determined that factual detail on those issues dates, provisions, alleged breaches was sufficiently present to necessitate a trial on those matters.
- Counterclaims by Cordell were not so well off: the court dismissed his breach of fiduciary duty claim. North Carolina statutes have no general fiduciary duty on the relationship of a managing member and other members of an LLC. The court stated that there is no fiduciary duty, except when Cordell might demonstrate a de facto special relationship of trust and domination. In this case, Cordell retained some ownership rights and control hence, no special obligation was established and his claim was rejected.
Such decisions explain why, by mid-2025, the case continues to be under litigation. Many procedural matters have been adjudicated by the judges but no final decision on a trial or a settlement is reported. Concisely: The internal suit of Dapper Development is going through the preliminary hurdles and is moving forward on its own merit.
Friel v. Dapper Labs: The NBA Top Shot NFT Securities Lawsuit
In May 2021, investor Jeeun Friel filed a proposed class action in the U.S. District Court for the Southern District of New York against Dapper Labs, Inc., claiming that the Moments NFTs, which are video highlights, are unregistered securities under the Howey test. The complaint referenced Dapper Labs marketing of Moments and Flow’s control over trading and withdrawal from its platform.
In Feb. 2023, Judge Victor Marrero denied Dapper Labs’ motion to dismiss, concluding that Moments alleged the elements of the Howey test as it was marketed. At the time one of the most watched cases in the NFT industry, it did not mean Moments were securities, it was merely a case that could proceed.
The case was never tried in court. In October 2024, the court approved a settlement of $4 million for a class of approximately 33 million Moments consumers who bought between June 2020 and December 2021. Average recovery, after attorneys fees, is approximately $0.12 per Moment. Dapper Labs said it had no wrongdoing to confess to, and still insists Moments aren’t securities. Under the terms of the agreement, the company will hand over control of the Flow blockchain to the independent Flow Foundation and allow competing trading platforms to be used on its marketplace. The Rosen Law Firm, P.A., served as class counsel and Paul Hastings LLP represented Dapper Labs. The distributions from the fund began in early 2026.
Understanding the NFT Securities Lawsuit Against Dapper Labs
The other significant legal challenge was whether NBA Top Shot NFTs are securities. The 2021 lawsuit claimed that:
- Investors put money into a centralised system
- Hoped to earn a profit from Dapper Labs’ work
- Depended on a company-owned blockchain, Flow
A U.S. court in 2023 let the case go ahead, and conducted a test to determine if the NFT is a security, known as the Howey Test.
This was significant because:
- It was one of the first cases where an NFT project was at risk of being classified as a security
- It established that not all NFTs are necessarily exempt from securities laws
The case eventually led to a $4 million settlement in 2024, resolving claims without establishing a definitive legal precedent.
The Dapper Development LLC v. Andrew Cordell Case
It’s important to note that it is the Dapper Labs (NBA Top Shot) lawsuit and not the Dapper Development LLC corporate case. The latter is a high-stakes partnership litigation that has been brought in the North Carolina Business Court (Case No. 24-CVS-18718).
Case Details: The dispute is between co-founders Brendan Gelson, Kyle Tudor, Mason Harris and Andrew Cordell. The central issues involve the termination of Cordell as a manager, and the valuation of the firm for a buyout.
- Recent Ruling (2024-2025): The court’s recent opinion on the ESI Protocol (Electronically Stored Information) underscores the challenges of “reasonable metadata” requests in contemporary business disputes.
- The Conflict: Cordell claimed a breach of fiduciary duty and “bad faith” termination, while the other partners invoked Section 5.2 of the Operating Agreement to justify the majority decision to terminate him.
- Why it’s important: The case is a precedent-setting moment for “closely held” blockchain and tech firms, with lessons on managing corporate governance and founder exits in situations where operating agreements are in dispute.
Dapper Labs Two Privacy Settlements Over the Meta Tracking Pixel
This is where most coverage of the Dapper Development lawsuit gets confused; Dapper Labs settled two separate privacy lawsuits, both on the same underlying issue: that it shared its user information with ad-tech firms without their consent, which could be a violation of the Video Privacy Protection Act (VPPA). The two cases are not the same case, and they are not resolved at the same time, but they were brought in by the same law firm and are approximately the same time.
The first case, Fan v. NBA Properties, Inc. et al., sued just for NBA Top Shot in particular, including NBA Properties and Dapper Labs. It stated that nbatopshot.com also had a Meta tracking pixel that it shared with Facebook accounts to produce over 1.2 million user video-viewing history without their consent. The case was settled for $7.05 million, approved by the court in December, 2025 and paid out in full to the class members. Bursor & Fisher, P.A. served as class counsel.
The second, Ohebshalom v. Dapper Labs, Inc., was the more general case. It only identified Dapper Labs and highlighted five platforms: NBA Top Shot, NFL All Day, Disney Pinnacle, UFC Strike and La Liga Golazos, saying its users’ data was shared with a broader group of third parties, such as Meta, Google, Microsoft, X, Reddit and TikTok. In that case, the settlement was $5 million and up to $5 for each valid claim. The claims deadline and final hearing for approval was both April 15, 2026 and that has passed, and according to the official settlement site, payments are being made to eligible claimants on July 1, 2026. B. Fisher, P.A. acted as counsel for the class.
Dapper Labs agreed to stop tracking the pixels in question with its tracking code on any page containing video titles under both settlements, pending changes to the VPPA, its repeal, or its determination that it does not apply. If you’re seeking money from either claim, both claim windows have closed, so if you had a valid claim, you can check the pertinent settlement site to check on the settlement status of your claim.
The $4M Securities Class Action (Friel v. Dapper Labs) is settled
In late 2024, the $4 million “Moments” as unregistered securities settlement went for final approval. This capped off a long saga that nearly rewrote the NFT industry.
The Business Impact & “Rules of the Road”
The resolution not only required the payment, but also changes to the Flow Blockchain. To prevent further “securities” classifications, Dapper Labs has done the following:
- Decentralization: The Flow blockchain has been fully decentralized to the Flow Foundation, becoming a permissionless public network.
- Marketplace Openness: NBA Top Shot Moments can now be listed and sold on third-party marketplaces, ending the “private ecosystem” argument that the court used to imply that the Moments were investment contracts.
- Secondary Market Recognition: In the payout, direct transactions were valued at 100%, whereas secondary market transactions were valued at 5%, demonstrating the difference between primary and secondary market transactions.
Why the Confusion? Two Unrelated Companies, One Shared Word
Dapper Development, LLC is a private, four owner residential real estate and homebuilding company, not publicly traded and unrelated to crypto in any way, located in North Carolina. Dapper Labs, Inc is an Vancouver-based venture-backed blockchain company, widely known for their games CryptoKitties and NBA Top Shot, and for developing the Flow blockchain. There’s no corporate connection between the two businesses aside from their shared name. The two companies do not have identical audiences, this is just a coincidence, and many articles about the topic in the news today make it even more confusing to sort out the two because they group them together in the same headline without distinguishing the two.
What This Means for Business Owners and Crypto Investors
The Cordell dispute serves as a stark reminder that if you are co-owner of a LLC, it’s important to clearly establish buy-out and removal provisions in the operating agreement before they are needed, rather than after, because ambiguity on how to value and remove a member’s interest is what can turn a disagreement into years of litigation.
Moments, as part of the Friel case, didn’t necessarily mean all NFTs are securities, but rather, it was specific to the way Dapper Labs marketed Moments and its control of the platform. The marketing of platform-lock-in and profit potential continues to be a securities-law liability for other NFT projects.
Both privacy settlements featured tracking pixels that will reveal what you’re viewing or doing back to Facebook, Google and other advertisers, without you knowing it. This is still a hot litigation topic, long after Dapper Labs.
This is not legal advice. If you are involved in a disagreement that is similar to what you are facing, consult the laws of your state and speak with a licensed attorney.
In all four cases, the scale of legal exposure that arises, both for regulators and for co-founders, business partners and users of the crypto companies, demonstrates the extent to which legal issues can play out even for the well-funded firms. Three of the four cases have been fully resolved and settled, but the case in North Carolina regarding real estate is still pending, so this page will be updated when/if that one is settled.
Claimants Roadmap: Check Your Status
If you are part of the Securities Class (2020-2021) or the Privacy Class (2024-2026), please keep an eye on:
- Official Settlement Portal: Always check frielvdapperlabssettlement.com or the official VPPA settlement portal to protect against scams.
- Payout Schedule: The securities payouts have already occurred in early 2015. Privacy payouts are expected to begin in late end of 2026 following the final fairness hearing.
Conclusion
The term Dapper Development lawsuit might serve as a cause of confusion since it can be used to describe two unrelated court cases. One is a case of an internal dispute between a North Carolina home-building company and its owners over contracts and control. The second is NBA collectibles and securities law made by blockchain. Knowing the facts it becomes obvious that they are different: Dapper Development (the real-estate LLC) works on the case of the member disputes under the state laws related to the business, and Dapper Labs is the activity connected with NBA Top Shot NFTs and federal securities laws. If you follow crypto news and legal updates, check out CrypStudio blogs for more simple guides and scam alerts.
By late 2025, the lawsuit against the real estate company has been pending in court and no settlement has been declared. In the meantime, Dapper Labs settled its NFT case in 2024 with a class-action lawsuit by paying the alleged victim 4 million dollars. These are the results that must not be disregarded by investors and participants: legal battles over ownership may either end in court or in a negotiated settlement. At any rate, it is important to be transparent, have clear agreements and be aware of legal rules. These two illustrations show that in either buying real estate or electronic cards, you need to understand the legal landscape, and if it is required, employ skilled legal advice to help you through it.
