Viacom ordered to pay $299 million to Harmonix

Delaware Supreme Court upholds previous decisions, forcing Viacom to pay $299 million to Harmonix shareholders.


A Delaware Supreme Court judge has ruled against Viacom, forcing the media conglomerate to pay $299 million in outstanding bonuses to Harmonix shareholders.

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The court's decision, as reported by the Hollywood Reporter, upholds past judgments from an arbitrator in December 2011 and a Delaware circuit judge in August 2012.

Barring a reconsideration of the case or its going before the U.S. Supreme Court, Viacom will be forced to pay the $299 million.

The suit stemmed from performance-based "earn-outs," which were set to be paid to Harmonix's former owners as part of its 2006 purchase. Viacom initially purchased the developer behind Guitar Hero for $175 million in 2006, and paid out $150 million in earn-outs in 2007.

Harmonix found significant success with its peripheral-based music games, but as the market began to show signs of overcrowding, Viacom reversed course. The company did not pay out in 2008 and demanded a refund for previous payments.

An independent arbitrator decided in December 2011 that Viacom owed Harmonix's shareholders a total of $383 million in unpaid earn-outs, and Viacom proceeded to challenge the decision in its home state of Delaware's Court of Chancery. While Viacom agreed in a previous settlement to pay out $84 million (the amount set for unpaid 2007 earn-outs), the $299 million calculated for 2008 earn-outs remained.

A Harmonix representative declined to comment.

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