"All you need is cash!"
A group of former shareholders of Rock Band developer Harmonix have raised a U.S lawsuit against its parent company, Viacom, over alleged attempts by the media giant to avoid paying out performance-based bonuses.
The group includes founders of the developer, Alex Rigopulos and Eran Egozy together with early investors in the company based in Boston. The lawsuit arises from an acquisition deal back in 2006 when Viacom bought Harmonix for $175m and went on to cause major difficulties over the next four years.
The complaint centres around an earn-out formula in performance-related pay which equated to 3.5 times any of the gross profit made in 2007 in excess of $32m with no cap. In 2008 this would be under similar terms with any gross profit exceeding over $45m in that year.
The demands of the ex-shareholders have highlighted that they want to:
"...recover damages arising from Viacom's manipulation of these earn-out payments by diverting opportunities from Harmonix for its own benefit in breach of the implied covenant of good faith and fair dealing that inheres in Viacomís contract with Harmonix."
Further details provided show that Viacom has already provided its shareholders with $150m of earn-out payments in 2007 in anticipation of positive performance of Harmonix's rhythm-action titles. No such payments have yet been made in 2008. The media giant also added in financial statements beginning from earlier this year that "we believe that we are entitled to a refund of a substantial portion of amounts previously paid".
Viacom is in the process of trying to find a buyer for developer Harmonix as it tries to sell on the developer it once held in high regard.
Court cases are always complicated matters, can take years to resolve and not always in and amicable fashion. The case continues.
Source: Gama
The group includes founders of the developer, Alex Rigopulos and Eran Egozy together with early investors in the company based in Boston. The lawsuit arises from an acquisition deal back in 2006 when Viacom bought Harmonix for $175m and went on to cause major difficulties over the next four years.
The complaint centres around an earn-out formula in performance-related pay which equated to 3.5 times any of the gross profit made in 2007 in excess of $32m with no cap. In 2008 this would be under similar terms with any gross profit exceeding over $45m in that year.
The demands of the ex-shareholders have highlighted that they want to:
"...recover damages arising from Viacom's manipulation of these earn-out payments by diverting opportunities from Harmonix for its own benefit in breach of the implied covenant of good faith and fair dealing that inheres in Viacomís contract with Harmonix."
Further details provided show that Viacom has already provided its shareholders with $150m of earn-out payments in 2007 in anticipation of positive performance of Harmonix's rhythm-action titles. No such payments have yet been made in 2008. The media giant also added in financial statements beginning from earlier this year that "we believe that we are entitled to a refund of a substantial portion of amounts previously paid".
Viacom is in the process of trying to find a buyer for developer Harmonix as it tries to sell on the developer it once held in high regard.
Court cases are always complicated matters, can take years to resolve and not always in and amicable fashion. The case continues.
Source: Gama
Companies:
Harmonix
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