Viacom Takes Harmonix Shareholders to Court for Millions of Dollars

Viacom Takes Harmonix Shareholders to Court for Millions of Dollars

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Harmonix's former parent company says that it paid out over a hundred million dollars to shareholders more than it should have.

It's been brewing for a while, but Viacom has sued the shareholders of Harmonix, the music game studio it formerly owned, in an effort to get back a very large chunk - nearly 90% - of the $150 million in bonuses it paid out in 2007.

According to the suit, the $150 million was based on a "preliminary calculation" for performance-based bonuses on the Rock Band series. These calculations apparently turned out to be very, very wrong, and the actual amount owed in bonuses was around $18 million. Viacom wants to have the difference, around $131 million, refunded to it. This won't come as a complete surprise to the Harmonix shareholders; Viacom first put forward the idea it might have overpaid over 18 months ago in a SEC filing.

Interestingly, Harmonix shareholders sued Viacom late last year for the opposite reason. The Harmonix suit alleged that the shareholders hadn't been paid enough, and Viacom was withholding performance bonuses for 2008. The shareholder's suit also said that Viacom manipulated payments and profits to minimize the amount bonuses it would have to pay out. The shareholders' suit is currently in the hands of a resolution accountant.

It's not for me to say who's right and who's wrong here; both sides clearly think they have a case, or they wouldn't have sued in the first place. Considering the opposing goals of the two cases, it's hard to see the two sides coming to a deal.

Source: Gamasutra

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Harmonix 1: "We got 150 MILLION in bonuses when the companies performance was bad. Think thats alright?"

Harmonix 2: "No, we need MORE!"

Harmonix 1: "Lets sue!"

I'm not saying they're in the wrong, since I don't know the circumstances of the case, but they got 150 MILLION freaking dollars, an amount that most people will never see in their lifetime...

FreakSheet:
Harmonix 1: "We got 150 MILLION in bonuses when the companies performance was bad. Think thats alright?"

Harmonix 2: "No, we need MORE!"

Harmonix 1: "Lets sue!"

I'm not saying they're in the wrong, since I don't know the circumstances of the case, but they got 150 MILLION freaking dollars, an amount that most people will never see in their lifetime...

The thing is there could very easily have been 500,000 or more shareholders so each person might not have actually gotten all that much. A big company like say EA would have millions of shareholders.

I doubt that Harmonix has earned anymore bonus money, but as far as what Viacom already paid them...

So I can have my money back if looking back I didn't enjoy RB3 as much as RB2? Nice!

So Viacom's argument is that they should be immune from making shitty business decisions?

Satsuki666:

FreakSheet:
Harmonix 1: "We got 150 MILLION in bonuses when the companies performance was bad. Think thats alright?"

Harmonix 2: "No, we need MORE!"

Harmonix 1: "Lets sue!"

I'm not saying they're in the wrong, since I don't know the circumstances of the case, but they got 150 MILLION freaking dollars, an amount that most people will never see in their lifetime...

The thing is there could very easily have been 500,000 or more shareholders so each person might not have actually gotten all that much. A big company like say EA would have millions of shareholders.

Harmonix isn't an openly traded company anymore. If I'm not mistaken, they used the 150 million dollar bonus to buy back their shares from Viacom.

Viacom should sue activision instead for ruining the market for music games by putting 8 pieces of crap out in a single year to crush anyone's interest in Harmonix's good work.

"Oh, well, that's okay, then. After all, we've just been letting that money lie around since 2007 rather than doing anything with it, in the off chance you might have made a mistake."

mronoc:
So Viacom's argument is that they should be immune from making shitty business decisions?

Pretty much.

I actually wonder whether the judge might laugh at this and throw it out; if a company can demand its shareholders to repay bonuses, then why can't customers sue a company they've bought from, claiming they feel they paid too much in hindsight?

 

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