It has come to my attention that a new filing in the ongoing legal struggle between former Gearbox corporate counsel, Wade Callender, and studio president, Randy Pitchford, provides evidence for one of the suit’s most damning accusations.
As everyone is probably aware by now, in late 2018, Pitchford sued Callender over a series of financial matters that included allegations that Callender misused company credit cards for personal expenses and destroyed evidence related to a home loan funded by the studio. Callender countersued a month later, presenting a salacious account of a USB drive full of pornography and sensitive corporate documents left by Pitchford at a Medieval Times restaurant.
Out of all the accusations included in the suit, one of them indicates that Pitchford siphoned $12 million in Borderlands bonuses intended for the studio. At the time this came to light in January 2019, Gearbox vehemently denied the entirety of Callender’s accusations by stating:
“The allegations made by a disgruntled former employee are absurd, with no basis in reality or law,” the studio told Kotaku. “We look forward to addressing this meritless lawsuit in court and have no further comment at this time.”
But it seems that Callender was being honest because on June 12, 2019, Callender’s attorneys submitted a new 76-page filing that included an amendment to the Borderlands 3 contract between Gearbox and 2K (originally dated November 29, 2016) that references the $12 million (plus another $3 million for remaining Gearbox co-founder and chief financial officer Stephen Bahl). This contract amendment includes a clause titled “Bonus for satisfaction of dedicated executive requirement.” This clause states that the developer (Gearbox Software, LLC, as defined by the contract) is eligible for a “recoupable” $15 million bonus.
In other words, upon satisfaction of the terms, publisher 2K Games would pay out $15 million to Gearbox split into three payments of $5 million each. These are funds earned by Pitchford and Bahl in their roles as Gearbox employees. 2K Games very much wanted Pitchford and Bahl involved in the project, and the clause ties the $15 million to three key development milestones (including “release to master” or what is commonly called “going gold”), their “attention toward the development and success of” Borderlands 3, and their personal engagement for 30 hours per week. The word “recoupable” is important because it indicates that the bonus was part of 2K’s funding of Borderlands 3’s development and, like most publisher expenses, must be paid back by way of royalties after the game ships.
In Callender’s original complaint, he alleged there was misappropriation of funds. In his most recent amended petition, he and his attorneys have provided both the original contract clause and an amendment to the “Bonus for satisfaction of dedicated executive requirement” clause. The March 1, 2017 amendment authorizes 2K Games to divert Pitchford’s $12 million recoupable bonus to his personal company, Pitchford Entertainment, Media, and Magic. The document, which is redacted, does clearly bear signatures for both Gearbox and 2K representatives.
In addition, the latest amendment points to Gearbox’s repeated insistence that “Callender was lying so egregiously” that the studio threatened to take action against Callender by filing a grievance against him with the State Bar of Texas. Gearbox has not followed through on this threat.
After seeing this all transpire, well, anything happening that is “Randy Pitchford,” is not good for future sales with Borderlands 3. If both Gearbox and 2K want to see this game succeed, maybe the best option at this time is to have either Randy stop promoting the game or temporarily step down as CEO of Gearbox since he is causing such a PR disaster with everything surrounding him at this time … You’d want the game to succeed!
Let’s wait and see what happens, and hope that Borderlands 3 does succeed. Stay tuned for more news right here at GamingLyfe.
