Ex-Gearbox lawyer, CEO Randy Pitchford enter legal battle over contract violations, corporate irresponsibility

Former Gearbox lawyer Wade Callender has filed a lawsuit against Gearbox CEO Randy Pitchford accusing Pitchford of breach of fiduciary duty, contract violations, and fraud, including a $12 million "executive bonus" advance on royalties from Borderlands that Callender claims would otherwise have gone to Gearbox employees.

According to Kotaku's report, this lawsuit comes directly on the heels of another lawsuit in the opposite direction: Gearbox first sued Callender in November, also for fraud and breach of fiduciary duty. Among the accusations include Callender failing to repay a $300,000 cash loan given to him by Gearbox, as well as other various loans and payments allegedly made to the company lawyer during his time there from 2010 to 2018. These ranged from tuition payments and other expenses involved in Callender obtaining his MBA, personal legal expenses, and abuse of company credit card privledges for personal expenses such as "family vacations, gun club memberships...and trying to get six-pack abs."

Callender's lawsuit against Gearbox and Pitchford, meanwhile, was filed in December of last year and alleges that the company CEO "shamefully exploited his oldest friend" Callender in a number of ways during the lawyer's time at the company. According to the suit, Pitchford allegedly made a number of verbal promises to Callender over the years regarding equity and specific compensation for legal services, but refused to put them in writing or deliver upon them. But the specific failures between two men are not where the suit ends.

Callender also alleges that Pitchford "breached his fiduciary duty" by receiving a secret "executive bonus" for Borderlands in the amount of $12 million, an advance on royalties that the lawsuit claims would have otherwise gone to Gearbox employees. The bonus was paid to Pitchford Entertainment Media & Magic, with Pitchford insisting this payment be redacted from Gearbox contracts and kept under wraps.

Another allegation included in the suit is that Pitchford "did not take his responsibilities...seriously" as CEO, with the cited example of an event in 2014 where Pitchford allegedly left an unsecured USB drive in a Dallas, Texas restaurant called The Medieval Times. The USB drive contained details about Gearbox plans and a number of its corporate partners, including Take-Two Interactive, 2K Games, Sega, Microsoft, Sony. It also allegedly contained "Pitchford's personal collection of 'underage' porn."

Shortly after the lawsuit came to light, Ars Technica tracked down a podcast from December of last year, just one day after said lawsuit was filed, where Pitchford speaks about this specific incident. In the podcast, which Pitchford appeared on to discuss his love of magic, he admits he left an unsecured memory stick at The Medieval Times containing "secrets of my company and future games in development" as well as "barely legal porn" from a cam girl whose handle was 'Only 18.'

Another accusation included in Callender's suit alleges that Pitchford and his wife "syphoned Gearbox profits" to host "Peacock Parties" parties at their home, where men exposed themselves to minors.

Gearbox contacted Kotaku following publication of the article both to issue a statement and specifically address that last accusation. On "Peacock Parties," a Gearbox spokesperson denied the use of such terminology, saying, "This is terminology that the Pitchfords have never used and was made up by Wade in a further attempt to paint a sensational picture that is demonstrably false." Instead, the spokesperson said Pitchford's parties were variety shows "that has featured some of the most respected and renowned performers in the world and has been attended by prominent members of the local community and larger media."

The company then issued the following statement on the lawsuit in general.

"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."

On Twitter, Pitchford offered his own statement.

"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.

"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.

"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."