Home / Uncategorized / Kixeye shareholders file lawsuit against Stillfront | Pocket Gamer.biz

Kixeye shareholders file lawsuit against Stillfront | Pocket Gamer.biz

VentureBeat said Kixeye’s sales rep, Fortis Advisors, has filed a lawsuit against Stillfront in the Delaware Chancery Court over a controversial earnout payment.

The allegation states that Stillfront deliberately violated its merger agreement for an earnout of $ 30 million if Kixeye met certain milestones.

Back in June 2019, Stillfront bought Kixeye for $ 90 million, with the earnout based on Kixeye’s projected financial performance for 2019.

Changes, changes

With this original deal, Stillfront did not acquire all of the Kixeye, as the latter intended to outsource operations in connection with the as-yet-unreleased, under-development game Kingdom Maker.

In early 2020, Stillfront announced that the team behind Kingdom Maker had been laid off, cutting around 20 jobs.

The reason for this comment is unclear, however, as the Kingdom Maker team has moved to Global Worldwide and continues to develop the game.

Fortis Advisors has accused Stillfront Group’s creative accounting team of making Kixeye’s results look worse in order to bypass this earnout payment.

The earnout was based on a non-GAAP financial performance metric that Stillfront allegedly retrospectively revised or intentionally manipulated its spending prior to the merger, making it nearly impossible for Kixeye to meet the earnout goal.

The Stillfront Group is also said to have significantly reduced spending on Kixeye’s games after the merger.

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