Gearbox boss Randy Pitchford accused of taking secret $12m bonus, more during legal tussle with studio's former lawyer

Gearbox CEO Randy Pitchford and the Borderlands studio's former general counsel are currently embroiled in a messy legal dispute, accusing each other of, among other things, breach of contract and breach of fiduciary duties, resulting in some extraordinary allegations being made.

Callender, for instance, claims that Pitchford struck a "side-deal" with 2K Games to secure a "personal, secretive 'Executive Bonus'" of $12 million USD. He also alleges Pitchford agreed to have his private "bonuses" (whether these are one and the same is unclear) counted as advances upon the royalties owed to Gearbox employees. As such, he says, employees "wont receive any of their accrued royalty or 'profit' shares until their work repays Randy's bonuses".

According to Kotaku, which broke the story, the fracas began when Gearbox sued Callender (a close friend of Pitchford's for over 40-years) for allegedly failing to repay money borrowed toward personal legal fees, as well as a $300,000 USD cash loan intended to help finance a new home purchase. On the latter point, Gearbox claims that Callender "knowingly and intentionally destroyed the written and executed Home Loan Agreement, which would prove to be evidence that would be harmful to his potential defenses in the case".

Gearbox also accuses Callender of misleading the studio with regard to certain tuition fees, and of using a company credit card for unapproved personal expenses, "including family vacations, gun club memberships and firearms accessories, and trying to get six-pack abs."

In response, Callender filed his own suit, accusing Pitchford of breaching his fiduciary duties "by exploiting Gearbox employees and property to fund [his] private cravings". Pitchford is also alleged to have violated Callender's employment contract and other miscellaneous contracts, including one related to a real estate company which both parties owned.

Pitchford, the filing claims, is "a manipulative and morally bankrupt CEO who shamefully exploited his oldest friend, a Texas attorney and military veteran named Wade Callender."

It's in this latter document that Callender's allegations are most severe. Alongside accusations surrounding the reported $12 million USD bonus, Callender puts forth other examples intended to illustrate Pitchford's alleged breach of judiciary duties, including an incident where Pitchford is claimed to have left a USB drive containing highly sensitive material (Gearbox employee details, development efforts, corporate partners, etc.) at a Medieval Times restaurant in Texas.

Here, the suit takes a darker turn, claiming that, "Upon information and belief, Randy Pitchford's USB drive also contained Randy Pitchford's personal collection of 'underage' pornography".

As noted by arstechnica, Pitchford himself corroborated elements of the USB stick story during an episode of The Piff Pod a day after Callender's suit was filed. In the podcast, he explains that a Medieval Times worker returned the stick "and also discovered the [camgirl] pornography. It was 'barely legal' porn. This girl's handle was 'Only 18.'" Pitchford claimed the stick contained one image, and that his executive assistant checked the returned device while he was away on holiday. "Before I know it," he said, "I think the entire office looked at it."

Elsewhere, Callender's suit alleges that Pitchford also syphoned Gearbox profits to fund parties thrown by himself and his wife. It claims that, during these parties, "adult men have reportedly exposed themselves to minors, to the amusement of Randy Pitchford".

As part of Kotaku's initial story, a Gearbox spokesmen told the website that, "The allegations made by a disgruntled former employee are absurd, with no basis in reality or law. We look forward to addressing this meritless lawsuit in court and have no further comment at this time."

A later, updated statement to Kotaku read, "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 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."

Pitchford has also offered a response of his own on Twitter, stating that, "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."

A second tweet added that, "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 try to associate me with such vile behavior in his own greedy pursuit of money." Pitchford concluded," As the day progresses, I am discovering who my my friends are. Thank you for your love and support. I am just going to try to focus on my work and trust that truth and justice will prevail with the courts."