A court battle now in its third year between Rock Band
developer Harmonix and former parent company Viacom received another nail in the coffin yesterday when the Delaware supreme court upheld two prior judgments against Viacom, confirming that the media conglomerate had sidestepped paying out hundreds of millions in bonuses to stockholders. Viacom is expected to owe $299 million U.S. under the terms of the verdict.
Harmonix first took Viacom to court over this issue in December 2010
, alleging that Viacom violated the terms of a 2006 acquisition deal
and manipulated costs in order to skirt paying out performance-based bonuses during Rock Band
's peak years of profitability.
Viacom paid Harmonix stockholders -- a group which included Harmonix founders such as Alex Rigopulos and Eran Egozy -- $150 million in bonuses in 2007, but later demanded a refund. Harmonix stockholders' representative Walter Winshall instead called for Viacom to pay out an additional $383 million
in unpaid bonuses, of which Viacom agreed to pay $84 million. Harmonix took Viacom to court for the remaining $299 million, and won against the media giant via an arbitrator in 2011 and Delaware's lower courts in 2012, but Viacom appealed to the state's supreme court, contesting the arbitrator's authority.
In light of this ruling, Viacom may yet decide to further appeal to the U.S. Supreme Court, or it may elect to accept the state courts' decision.