A former Gearbox employee has provided proof that CEO Randy Pitchford diverted funds to his personal company.
The legal saga that has dogged Gearbox CEO Randy Pitchford was brought into the spotlight when former Claptrap voice actor David Eddings revealed that he would not reprise his role as the franchise’s lovable robot mascot. In a series of tweets, Eddings accused Pitchford if siphoning away company funds intended as a bonus for Gearbox employees and instead diverting them to his personal accounts.
That legal battle began last November when Gearbox sued former company lawyer Wade Callender for using his company credit card for personal expenses and for failing to pay back a loan to buy a house. Callender then countersued Pitchford, accusing him of the financial misconduct Eddings alluded to just a month ago.
In addition, Callender also accused Pitchford of leaving a USB drive filled with sensitive corporate info at a Medieval Times restaurant, including several folders filled with pornographic images.
Previously, these allegations were nothing more than vague concepts debated in a court of law, but now Callender has provided a 76-page filing proving the claim that Pitchford diverted funds.
The filing, which was obtained by GameDaily.biz, includes a contract between publisher 2K Games and Gearbox to provide a $15 million bonus payment for the development of Borderlands 3. Those funds are “recoupable”, meaning that 2K expects to get their money back in the form of royalties once the game goes on sale.
An amendment to the contract dated March of 2017 changed where part of those funds would be headed. Instead of being deposited to Gearbox’s bank accounts, $12 million was diverted to Pitchford’s personal company, Pitchford Entertainment, Media, and Magic (the remaining $3 million was sent to Gearbox Chief Financial Officer Stephen Bahl).
This might seem like a smoking gun, but the bonus clause mentioned both Pitchford and Bahl by name rather than just Gearbox. And because Pitchford has a 51% controlling interest in Gearbox, his lawyer’s are arguing that he can do whatever he wants with whatever money Gearbox earns.
Normally, these bonuses would be distributed amongst the company’s employees or reserved for future game development.
2K has so far refused to comment on the matter. A court date is scheduled for July of 2020, which threatens to cast a shadow over the upcoming release of Borderlands 3.
For the full report, head on over to GameDaily.biz.