Def Jam Rapstar publishers sued for alleged fraud

City National Bank alleges publishers Konami and Autumn Games lied to secure $14M loan to distribute 2010 karaoke rap game, seeks $8.9 million.

City National Bank (CNB) has sued Konami and Autumn Games for millions over claims that the game makers lied to secure a $14 million loan to distribute rap karaoke game Def Jam Rapstar. According to a report at Courthouse News, the publishers assured CNB that revenue from the game would cover the loan, but the bank has yet to receive a dime of reimbursement.

CNB claims Konami and Autumn lied to secure a $14M loan to distribute Def Jam Rapstar.

"CNB has recently learned that defendants' representations concerning financial conditions and repayment of the loan--both before and after the loan was approved--were false at the time they were made and that defendants never had any intention of repaying the loan as promised," the complaint reads. "Rather than paying game-related proceeds directly to CNB as agreed, defendants have kept all game-related proceeds for themselves and have refused to remit any such proceeds to CNB."

As a result, CNB is seeking more than $8.9 million in damages for the alleged "fraud, negligent misrepresentation, breach of contract, breach of covenant of good faith and fair dealing, money had and received, unjust enrichment, recovery of personal property, and punitive damages."

An Autumn Games representative told GameSpot it cannot comment on ongoing litigation, and as of press time, Konami had not responded to GameSpot's request for comment.

Following the approval of the loan, CNB says Konami and Autumn Games made "baseless and unrealistic projections" that Def Jam Rapstar would ship 2.5 million units during its first year. The game was released in October 2010 and did not make the NPD's top-ten list during its launch month. Just two months after it launched, the MSRP for the game dropped from $60 to $40.

This is not the only lawsuit over Def Jam Rapstar. Last month, music giant EMI sued game developers 4mm Games and Terminal Reality for at least $8 million over allegations that the title includes numerous unlicensed songs.

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Discussion

10 comments
JimmeyBurrows
JimmeyBurrows

"CNB says Konami and Autumn Games made "baseless and unrealistic projections" that Def Jam Rapstar would ship 2.5 million units"

 

Isn't it the banks job to make decisions as to how safe the loan is? If not, then wtf are they getting such large bonuses for?

SomePlayaDude
SomePlayaDude

The only Def Jam game i would play is the mixed UFC/wrestling game. If only EA would not turn their backs on such a crazy fun franchise.

G1Ga-B1T3
G1Ga-B1T3

Funny that when an organization is a victim of the same crime they have been perpetrating on the American people for decades, all of the sudden the sky is falling. I for one, have a hard time sympathizing with bankers in general. Servers them right.

Lawdog1521
Lawdog1521

If someone borrows 14 million dollars, how do they expect to get away with not paying back? What, were they just not going to answer the phone?

DAMSOG
DAMSOG

HAHAHAHAH....but on a serious note.....HAHAHAHAHAHA The world has truly gone mad. 

FuryX-4
FuryX-4

Reading this news makes me think that lawsuits are getting ridiculous!

FET4LJUICE
FET4LJUICE

Damn! I saw this game last week at the bargain bin for $10 and now two lawsuits? Thats some voodoo s*** going on.

Tsuchikage
Tsuchikage

Two multimillion dollar lawsuits over one game?  Def Jam Rapstar is like a lightning rod of bad luck.

leviathan_wing
leviathan_wing

 @FuryX-4 dont steal their money then.  the lawsuit isnt ridiculous its the reason for it.

FuryX-4
FuryX-4

 @leviathan_wing Reason? Yeah, for a system that's broken. Using it to get more money and having a dumb reason why to sue. (few have good reason).