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(Update) Wild lawsuit against Gearbox CEO Randy Pitchford alleges wrongful $12M bonus and 'underage' pornography

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There's going to be some messy litigation in Texas. Gearbox CEO Randy Pitchford and former Gearbox in-house attorney Wade Callender are suing each other in two separate actions, both alleging that the other has breached their legal obligations to the company.

As discovered by Kotaku, Gearbox originally filed a lawsuit against Callender in November 2018 for misusing company funds. It's said that Callender borrowed money from the company for a home loan and tuition that wasn't fully paid back. Further, Callender is accused of abusing a Gearbox company credit card for personal expenses such as "family vacations, gun club memberships and firearms accessories, and trying to get six-pack abs."

The case against Callender, which was filed in Texas' Collin County District Court, can be accessed here but there's no option to view the individual pleadings. However, Callendar answered the Complaint earlier this week and also filed a motion to change venue.

Callender then sued both Pitchford and Gearbox in December 2018, possibly in retaliation to Gearbox's lawsuit. The entire Complaint can be read here. The crux of the lawsuit is that Callender says Pitchford took a secretive $12 million bonus from Take-Two Interactive in 2016 that was funneled into Pitchford Entertainment Media Magic, LLC. According to Callender, that money should have rightfully been paid out to Gearbox employees and to help fund the development of the next Borderlands game.

However, things take a dark twist. Callender also states that Pitchford accidentally forgot a USB drive at a Dallas-area Medieval Times restaurant in 2014. Callender alleges that the USB drive contained both highly-sensitive business documents and "underage pornography." Pitchford was supposedly in San Francisco at the time the drive was recovered, and Callender -- without yet knowing the contents of the drive -- directed Gearbox staff to duplicate the files so they could be sent to Pitchford. Pitchford allegedly intervened and ordered the duplicate files to be immediately destroyed. Callender goes on to also accuse Pitchford of using Gearbox company funds to throw personal parties at his house where older men would expose themselves to minors.

Callender is still an active licensed attorney in Texas according to the Texas Bar Association. Attorneys, who are de facto officers of the court, have an elevated ethical duty to tell the truth and to avoid filing frivolous actions. That being said, Callender's claims of underage pornography could see him as the subject of a libel suit and disciplinary action if untrue; however, it's important to note that truth is an absolute defense to defamation claims. (Side note: I'm not sure what place the underage pornography allegation even has in a civil suit when Callendar isn't the injured party by the existence of that USB drive.)

It's all a lot to process and we're just at the very beginning. In a statement to Kotaku, Gearbox said "The allegations made by a disgruntled former employee are absurd, with no basis in reality or law. We look forward to addressing this meritless lawsuit in court and have no further comment at this time."

Pitchford and Callender were lifelong friends since childhood before their relationship soured in recent years. This is going to be a bumpy ride.

[Update: Gearbox subsequently sent a follow-up statement to Kotaku concerning Callender's claims: "Gearbox will be filing a grievance with the State Bar of Texas against our former general counsel Wade for disciplinary proceedings for filing a lawsuit that includes accusations that he knows to be untrue. The lawyer's rules of professional conduct expressly prohibit the filing of documents that are knowingly false. The tell is within Wade's claim itself -- his use of hedged lawyer language and clever application of quotation marks betray that he knows that the impression he is trying to create is based in lies. We imagine that he used the quotation marks and lawyer language in hopes that will give him some angles of defense when we inevitably take action against him for false statements. Wade is engaged in a shakedown and he's clearly using deceit and lies to try to cause damage by promoting a narrative that he knows is false."]

Former Gearbox Lawyer Accuses CEO Randy Pitchford Of Taking Secret $12 Million Bonus In Lawsuit Gearbox Calls 'Absurd' [Kotaku]

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Brett Makedonski
Brett MakedonskiManaging Editor   gamer profile

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Filed under... #Gearbox Software #lawsuit #Legal System

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