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Viacom Denies Harmonix Ex-Shareholders' Allegations, Says Offers Were 'Spurned'

Viacom Denies Harmonix Ex-Shareholders' Allegations, Says Offers Were 'Spurned'

December 21, 2010 | By Leigh Alexander

December 21, 2010 | By Leigh Alexander
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More: Console/PC

Viacom claims a lawsuit brought against it by former Harmonix shareholders stems from the poor decisions of the shareholders' representative, not from its own wrongdoing.

Accused of intentionally manipulating its costs to avoid having to pay Rock Band-related performance earn-outs to Harmonix, Viacom now tells Gamasutra it gave the shareholders every opportunity to receive favorable payments -- and that shareholders should blame their representative, Walter Winshall, and not it.

"Viacom fulfilled its contractual obligations and our actions were completely appropriate and consistent with the terms of our agreement with Harmonix shareholders and the interests of our shareholders," the MTV Games parent company says.

"Mr. Winshall made a decision to spurn our early proposals, which were highly favorable to the stockholders he represented," the company continues. "He failed to get the unjustified windfall he hoped for and as a result damaged those shareholders, who are obligated to repay amounts already received. "

"Having failed in his game, he is attempting to rewrite the contract and history with false and irrelevant claims, no doubt to protect himself from the very unhappy stockholders he represents."

While the amount actually owed by Viacom to Harmonix's former shareholders under the terms of the acquisition can be determined by careful accounting, the suit takes issue with Viacom's behavior after the acquisition.

The complaint, revealed by Gamasutra earlier today, alleges that due to the potentially enormous payments it would owe Harmonix, based on the tremendous success of Rock Band in 2007 and 2008 under the earn-out agreement, Viacom sought ways to reduce payments to Harmonix's shareholders -- including the alleged manipulation of a mid-earnout negotiation of the distribution agreement with Electronic Arts' EA Partners division.

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