Gearbox CEO Accused of Taking Secret $12 Million Bonus for Borderlands [Update: Pitchford Comments]

Gearbox CEO Accused of Taking Secret $12 Million Bonus for Borderlands [Update: Pitchford Comments]

Gearbox and its former lawyer are suing each other.

Update: In a series of tweets Gearbox CEO Randy Pitchford responded to today's reports surrounding the lawsuit against him. "As a father, I find crimes against children to be especially repugnant. It is very painful that a former friend and colleague would lie to associate me with such vile behavior in his own greedy pursuit of money."

Pitchford said that because of the pending lawsuits he can't comment as much as he'd like. But Gearbox sent Kotaku a new statement following its initial report.

"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 inevitibly 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."

Original Story

Gearbox CEO Randy Pitchford is in a complicated and messy legal battle with the former general counsel of Gearbox. Both parties are suing each other over various allegations, including an accusation that Pitchford took a secret $12 million bonus from Take-Two Interactive for Borderlands.

As detailed in a report by Kotaku, Gearbox initially sued Wade Callender, Gearbox's lawyer from 2010 to 2018, for fraud and breach of fiduciary duty. Gearbox claims that Callender borrowed money from Gearbox for a home loan and tuition that Callender did not pay back in full. Gearbox also alleges Callender spent company funds for private expenses like "family vacations, gun club memberships and firearms accessories, and trying to get six-pack abs."

Callender filed a separate suit at the end of 2018 against Pitchford. He accuses the Gearbox CEO of violating various contracts at both Gearbox and a separate real estate company Pitchford and Callender co-own. "The allegations made by a disgruntled former employee are absurd, with no basis in reality or law," said Gearbox in a statement to Kotaku. "We look forward to addressing this meritless lawsuit in court and have no further comment at this time."

Callender's full lawsuit, available online, details the $12 million "executive bonus" paid to Pitchford's private company 'Pitchford Entertainment Media Magic, LLC.' Callender's lawsuit says this was an advance upon royalties that could have otherwise gone to Gearbox staff for Borderlands.

Callender's lawsuit then goes into other accusations including a USB drive belonging to Pitchford that was left in a Dallas, Texas restaurant that included sensitive corporate information for Gearbox and companies like Sega, Sony, Microsoft, and others. The lawsuit also alleges "upon information and believe," that "Randy Pitchford's USB drive also contained Randy Pitchford's personal collection of 'underage' pornography."

Ars Technica reports that Pitchford corroborated some parts of the USB story on a December 22 episode of The Piff Pod podcast. Pitchford shared his enjoyment of “camgirl” pornography and confirmed he copied one such video “to this memory stick” to figure out how the camgirl host faked the act of female ejaculation, calling it magic and her "a magician."

Pitchford then reveals that he left this USB drive at a Medieval Times Dinner and Tournament where “Some kid, an employee of Medieval Times, discovered this memory stick, took it home… and discovered secrets of my company and future games in development, and also discovered the pornography.”

Pitchford says it was “barely legal” porn and that the host’s name was ‘Only 18.’ Pitchford retrieved the flash drive in exchange for Gearbox “swag” and suggested putting the ‘Only 18’ performer on the cover of Genii Magazine, a magazine about magic that Pitchford owns.

Former Gearbox vice president of business development David Eddings tweeted "Yes, it's true," shortly after the initial reports of the lawsuit. Though it remains unclear what Eddings is referring to, and the allegations stated in Callender's lawsuit remains uncorroborated.

Gearbox is best known for its work on the Borderlands series, and more infamously for games like Duke Nukem Forever and Aliens: Colonial Marines. Both Gearbox's and Callender's lawsuits against each other can be read on Scribd.

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Matt Kim

News Editor

Matt Kim is a former freelance writer who's covered video games and digital media. He likes video games as spectacle and is easily distracted by bright lights or clever bits of dialogue. He also once wrote about personal finance, but that's neither here nor there.

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