NEWS - Monday, December 27, 2010


Hamonix Shareholders File Law Suit Against Viacom

A group of former shareholders of Rock Band developer Harmonix are suing Viacom, alleging the developer’s (soon-to-be former) owner have attempted to renege on promised performance-based bonus payouts.
As Gamasutra reports, the central issue is an earn-out formula that was originally in the acquisition deal when Viacom purchased Harmonix back in 2006. The formula would have Viacom pay Harmonix shareholders bonuses that equal 3.5 times any gross profit in excess of $32 million for 2007 and in excess of $45 million for 2008. Viacom indeed paid $150 million in bonuses for Harmonix’s 2007 performance, and they were expected to pay in excess of another $150 million for Hamonix’s 2008 performance. According to the lawsuit, though, Viacom never paid the second, 2008-based bonus.

Furthermore, the crux of the lawsuit is that Harmonix’s former shareholders -- which include founders Alex Rigopulos and Eran Egozy -- allege that Viacom have attempted what they consider to be dirty tricks to reduce the amount of bonus payments it should have to owe. One example, according to the plaintiffs, is that Viacom "decided to forego the opportunity to reduce [Electronic Arts’] 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."

In effect, not lowering EA’s distribution fees eventually meant less gross profits, and therefore less bonus payments for Harmonix. "Although a reduced 2008 EA distribution fee would have increased Harmonix’s gross profit and operating profits in 2008, Viacom realized that every $1.00 of distribution fees that Harmonix saved during 2008 would require Viacom to pay an additional $3.50 of earn-outs to the [ex-shareholders]."

As a result, Harmonix’s ex-shareholders group are now seeking 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 Viacom’s contract with Harmonix."

Viacom hasn’t commented on the lawsuit yet. Back in November, Viacom announced it was planning to sell Harmonix.


Source: http://www.1up.com

Site Statistics

Registered Members: 79,974
Forum Posts: 725,965
Xbox One Titles: 6,287
Xbox 360 Titles: 1,086
Xbox 360 Kinect Titles: 95
Xbox 360 Arcade Titles: 586
Original Xbox Titles: 987
Staff Reviews: 2,569
Member Reviews: 10,339
News Articles: 16,543
Screenshots: 39,030
Xbox 360 Achievements: 45,112
Xbox 360 Faceplates: 2,016
Cheat Codes: 1,706

Latest News








See News Archives

Community Forum Activity

KeyWe Giveaway!
Post by Variation-XBA
0 Replies, 24663 Views

2021: XBA is still here
Post by shrew king
38 Replies, 201505 Views

Watch Dogs: Legion
Post by Nato King
0 Replies, 123208 Views

Xbox Series X or S
Post by Nato King
5 Replies, 140553 Views

Spellbreak Grand Magus Pack (3) and Starter Pack (7) Giveaway!
Post by Variation-XBA
0 Replies, 130396 Views

I pay $ 1000! I search the Element 54 Canadian launch Team signaturen Faceplate
Post by Smill
0 Replies, 152152 Views

Xbox one no signal
Post by debrartin
0 Replies, 142029 Views

do you remember?
Post by SnoochyBoochy
3 Replies, 211398 Views

i haz xbox
Post by SnoochyBoochy
0 Replies, 165649 Views

Claiming the first thread of 2020
Post by Kraft
7 Replies, 261515 Views

Important! I pay $ 1000! I search the Sweden launch and the Element 54 Faceplate
Post by Smill
3 Replies, 148152 Views

Squad Up
Post by samslophead
0 Replies, 251356 Views

TERA Skinned Xbox One X Giveaway!
Post by Variation-XBA
0 Replies, 177956 Views

Starfield Release expectations?
Post by DJ tx
4 Replies, 307292 Views

Issue with Xbox live on Xbox home
Post by rcmpayne
0 Replies, 166169 Views

© 2000-2024 XboxAddict.com - All rights reserved. All trademarks are properties of their respective owners.
Xbox is a registered trademark of Microsoft. XboxAddict.com is not affiliated with Microsoft.

Made in Canada
Site Design by Cameron Graphics