What started as a legal battle between Gearbox Software CEO Randy Pitchford and his company's former legal counsel, Wade Callender, has boiled over into the public sphere because of a number of shocking details in a recent lawsuit.
Gearbox, the game development studio in Frisco behind such titles as Borderlands and Aliens: Colonial Marines, initially sued Callender late last year for fraud and "breach of fiduciary duty." One month later, Callender's responding suit has alleged, among other things, that Pitchford siphoned $12 million in royalties to a private business and conducted a number of careless, damaging and potentially illegal activities.
The initial court case, first discovered by gamer site Kotaku's Jason Schreier, was filed in Collin County on Nov. 11 and alleges Callender consistently failed to repay money borrowed from Gearbox to help pay for law school tuition, a home loan and other personal expense. Additionally, they claim he "abused the privilege of credit card access by charging unapproved, wholly personal expenses, including family vacations, gun club memberships and firearms accessories, and trying to get six-pack abs."
All said, it seemed a fairly tame professional spat between two employees who reportedly were once good friends. That changed when Schreier found a second lawsuit filed in Dallas County on Dec. 21 by Callender. It was a response to the first and outlined a series of actions the plaintiff believed showed Pitchford "did not take the responsibilities of his position seriously."
Callender's suit alleges Pitchford made a deal in 2016 with Take 2 Interactive, the publisher of Borderlands, to accept a $12 million advance (called a "secret 'executive bonus'" in the suit) against the royalties earned from sales of the game. The payment reportedly went to Pitchford Entertainment Media & Magic LLC. Callender and his lawyers claim Pitchford denied raises "predicated on low cash reserves" at the same time as this deal, which constitutes the "tip of the Pitchford iceberg" when it comes to corporate malfeasance.
The most alarming part of the lawsuit recounts the details of a personal USB drive belonging to Pitchford lost at Medieval Times Dinner & Tournament on North Stemmons Freeway. Callender claims an employee of the restaurant found the drive, took it home and accessed unprotected files, including “details about Gearbox plans and a number of its corporate partners, including Take-Two Interactive, 2K Games, Sega, Microsoft, Sony." It also allegedly contained "'underaged' pornography," the suit claims.
The publication Ars Technica discovered an episode of The Piff Pod released on Dec. 22, one day after Callender's lawsuit, on which Pitchford recounts his version of events, along with a justification for the contents of the USB. He admitted to losing the drive and that it contained "secrets of my company and future games in development." He also claimed to be a fan of camgirl pornography, and that the video on the drive impressed him for less-than-sexual reasons. Pitchford, an avid magician himself, was simply impressed with how the actress in the video had simulated ejaculation using an alarming volume of water.
“It’s a woman who is masturbating,” Pitchford said on the podcast. “And when she has some experience that appears as if she’s having an orgasm, a huge amount of fluid comes out of her vagina.
"I realized, this is not a sex worker," Pitchford continued. "This is a fucking magician." He clarified later that she was not underage. "It was 'barely legal' porn. This girl's handle was 'Only 18.'"
The lawsuit against Gearbox goes on to claim Pitchford and his wife funneled more money from the company into funding "Peacock Parties" at their Frisco home, where "adult men have reportedly exposed themselves to minors, to the amusement of Randy Pitchford.” Though not accessible to the public, the Pitchfords do own and operate the Peacock Theater, an establishment created in 2016 with the mission of cultivating a local arts scene in Frisco.
Pitchford responded on Twitter after the news went public:
The attacks made by my former friend and colleague have no basis in reality or law. He is simply trying to shake me down for money. We will win, but because lawsuits are pending I can’t comment as much as I’d like. I am shocked by his lies. Thanks for your love and support.— Randy Pitchford (@DuvalMagic) January 11, 2019
Later, former VP of business development at Gearbox David Eddings sent a cryptic tweet that simply read, "Yes, it's true." He later clarified his meaning:
Liar? ?— David Eddings (@davideddings) January 12, 2019
Perv? No idea.
After the publication of Kotaku's original article last week, Gearbox's lawyers sent them a response saying Callender's "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."
When the Observer followed up asking what Gearbox's lawyers meant by "hedged lawyer language and clever application of quotation marks," they responded with more clarification:
"Callender’s suit uses the term ‘upon information and belief.’ As a lawyer, Callender knows that this is a common legal tactic used when a pleader does not have first-hand information. His avoiding making a direct statement of such facts is intended as a safeguard against sanctions when his accusations are proven false. Furthermore, his use of quotation marks around certain words contained in his outlandish accusations are another sign of Callender’s intent to create an untrue narrative and avoid using definitive language. We are confident in our cases and trust that truth and justice will prevail with the courts."
They also informed us that recordings from the Peacock Theater would further validate Callender is in the wrong about the "Peacock Parties," but the recordings cannot be made public without express consent from the performers. They invited us to view the videos in private.
Callender's lawyers have yet to provide comments. The Frisco Police Department is not currently investigating Pitchford or Gearbox on any charges alleged in the lawsuit.
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Here is the full Gearbox lawsuit against Callender:
And here is Callender's lawsuit against Gearbox: