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Viacom ordered to pay out $299M to former Harmonix stockholders
Viacom ordered to pay out $299M to former Harmonix stockholders
July 17, 2013 | By Kris Ligman

July 17, 2013 | By Kris Ligman
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More: Console/PC, Business/Marketing



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.


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Comments


Mike Griffin
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"...paying out performance-based bonuses during Rock Band's peak years of profitability."

Before the big instrument-based music game crash happened, people were making some pretty massive bonus deals while riding the wave. Stockholders believed the music would never end! Alas.

Sean Sang
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Well in fairness the crash was more due to Activision over saturating the market. Something that is out of the hands of both Viacom and Harmonix. Still, it was a crazy deal to begin with and Viacom by the sounds of it didn't want to honor that agreement. Hope they get what their due and put it back into new projects.

Maurício Gomes
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A deal is a deal...

If you shot our foot with the deal, it was your bad call.


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