Viacom files $131M suit against former Harmonix shareholders

Viacom has filed suit against the former shareholders of Harmonix, claiming it miscalculated a payout in 2007 and is now owed the difference. This mounts on top of a suit Harmonix shareholders filed against Viacom last year.

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Viacom has filed suit against the former stockholders of Harmonix, seeking $131 million to make good on miscalculated payments from 2007. The suit alleges that the company was given $150 million for performance-based payouts, but the company only generated an earn-out payment of $18 million. Viacom is seeking to be refunded for the remaining cost.

Gamasutra reports that the company claims the shareholders "are not entitled" to the full payout amount. But the shareholders have already argued just the opposite: they filed suit against Viacom last year, claiming they were never paid for the 2008 bonuses, after the Rock Band franchise brought in over $1 billion through 2008 and the first quarter of 2009. The suit alleges that Viacom negotiated fees with EA to benefit itself rather than Harmonix shareholders, and that it is still owed money from a held account that was pending the resolution of patent suits. That case is still pending.

For its part, Viacom already has some money in its coffers -- selling Harmonix off earlier this year gave the company a tax benefit of roughly $115 million. So you know, they're not exactly begging for change.

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From The Chatty

  • reply
    September 21, 2011 8:45 AM

    Steve Watts posted a new article, Viacom files $131M suit against former Harmonix shareholders.

    Viacom has filed suit against the former shareholders of Harmonix, claiming it miscalculated a payout in 2007 and is now owed the difference. This mounts on top of a suit Harmonix shareholders filed against Viacom last year.

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      September 21, 2011 9:02 AM

      Viacom sold Viacom? I'm not sure what that last paragraph means.

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        September 21, 2011 9:06 AM

        That whole last paragraph is stupid. The amount of money they have has nothing to do with this.

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          September 21, 2011 9:44 AM

          Yeah, it's really stupid to have that in the article.

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        September 21, 2011 9:16 AM

        The more accurate statement is:

        Viacom sold HMX to their shareholders, reportedly for $50.00 (not a typo); the shareholder company took responsibility on unsold inventory and other financial matters, to the tune of about $115M - eg, allowing Viacom to write all that financial stuff as a tax break, allowing them to report a better profit margin on that quarter.

        *that* has nothing specifically to do with this lawsuit.

        The lawsuit is that back in 2007, Viacom payed HMX $150M bonus for strong performance of the Rock Band product. 2009 and the death of music games happened, and Viacom looked back at that payout and starting making threats about it being too high in retrospect. After the above selling of HMX , the shareholders make a first strike to Viacom, claiming that the bonus was actually too low, by about $13M (IIRC) based on terms. Viacom is now counter-suing, saying it was about $131M too high.

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          September 21, 2011 9:39 AM

          Thanks, looks like it's fixed and linked now.

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      September 21, 2011 9:13 AM

      By shareholders does it mean everyone who owns shares? If it's publicly traded does that mean Joe Schmo public investor is also named in the suit?

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      September 21, 2011 3:07 PM

      Not cool, Viacom. Definitely not cool.