Take-Two slapped with $50M suit

Seeking damages, ex-Jack of All Games head claims breach of oral contract by former CEO Richard Roedel and president Paul Eibler.


Take-Two is a publisher as infamous for its own legal travails as for those of the characters in its best-selling Grand Theft Auto franchise. Last Friday, another claim was staked against the publisher, this time by a former executive seeking in excess of $50 million in damages.

Robert Alexander filed a complaint with the US District Court of Nevada claiming that he was denied compensation due to him under his employment agreement, as reported by GamePolitics. Specifically, the complaint alleges that former Take-Two president Paul Eibler as well as ex-CEO Richard Roedel reneged on an oral agreement to honor Alexander's contract when they took the reins of the company from disgraced Take-Two cofounder Ryan Brant in 2004.

As detailed in the original complaint, which was obtained by GameSpot, Alexander served as president of game distributor Jake of All Games at the time of its acquisition by Take-Two in 1998, having grown the business from "limited revenues" to $118 million by the end of that year. Alexander remained onboard as president of Jack as well as a Take-Two board member until resigning in 1999. After an 18-month noncompete agreement, Alexander landed at PC game distributor COKeM Intemational in 2000, where he again claims to have dramatically grown company revenues.

In 2003, Alexander formed niche-game distributor Game Ballers, which maintained an extensive partnership with Jack of All Games. After being heavily courted by Take-Two, Alexander claims, he rejoined the company in early 2004, hammering out a contract that included "a monthly expense allowance of $25,000; an annual salary of $240,000 and a 20 percent annual raise for three years; options to purchase 333,000 shares of Take-Two common stock or vesting over three years; 50,000 shares of Take-Two common stock, $.50 per unit on games purchased on behalf of Take-Two or Jack of all games through Alexander, Game Ballers, Take-Two, or Jack of All Games; a onetime cash bonus of $500,000 on increasing sales revenues with Sam's and Costco; and between 3.25 percent and 4.25 percent of the company's annual net sales of customers introduced by Alexander."

And then the trouble began. After Bryant's departure stemming from a stock-option backdating scandal, Roedel and Eibler took on their respective roles as Take-Two president and executive chairman. Alexander claims that Roedel immediately asked to be briefed on his duties, saying "it was important for Roedel to know because Alexander was the highest-paid employee."

Alexander claims that after the meeting, Roedel "began advancing a scheme" that would deny him compensation due under his previous contract. This "scheme" allegedly involved renegotiating Alexander's compensation, with Roedel allegedly claiming that Take-Two would continue to honor Alexander's previous contract until both parties had agreed on a new one. After several months of noncompliance with this promise, Alexander claims that he was informed by then-Jack of All Games president David Rosenbaum that Roedel and Eibler had no intention of paying him, and that Rosenbaum was ordered to cease doing business with Alexander's Game Ballers.

As of press time, Take-Two had not responded to requests for comment concerning the ongoing litigation.

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