Harmonix Founders Suing Viacom


Posted December 21, 2010 - By Stephen Johnson

Rock Band 2

The fallout from Viacom's decision to sell Rock Band developer Harmonix has begun falling out. Former shareholders, including  Harmonix founders such as Alex Rigopulos and Eran Egozy, filed a U.S. lawsuit against Viacom, alleging the media company is not paying out bonuses owed.

The lawsuit says that the suit was filed to "recover damages arising from Viacom's manipulation of ... 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 Viacom’s contract with Harmonix."

The issue dates back to the original acquisition of Harmonix back in 2006. According to the suit, the terms of the buyout included bonuses to be paid on future profits from the Rock Band franchise. As sometimes happens in these cases, the two parties seem to have very different ideas of exactly how much money should be paid out to shareholders. The suit contends that Viacom tried to find ways to pay less to shareholders, including "a mid-earnout negotiation of the distribution agreement with Electronic Arts' EA Partners division." 

According to the suit, Viacom "decided to forego the opportunity to reduce EA’s distribution fees during 2008 (or in any other way enhance Harmonix’s net income or Gross Profit for 2008), and instead demanded benefits for itself (rather than Harmonix) in exchange for allowing EA to continue distributing Rock Band."

Source: Gamasutra

Harmonix Founders Suing Viacom


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