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.”
