Shrapnel’s game studio Neon Machine has filed a major lawsuit. At the center of this conflict are claims of a hostile takeover by the company’s largest shareholder and 4D Factory CEO Cort Javarone, who is under scrutiny for ousting CEO Mark Long.
To make matters worse, Javarone and others refuse to release capital to other interested parties, a move most commonly done to maintain a majority stake within the company. Investors suffering losses include those who pumped $20 million into Shrapnel last month, such as Griffin Gaming Partners and Polychain Capital.
Keeping a positive attitude during this time of turmoil, Shrapnel affirms his dedication to rolling out early game access as usual, in just a few weeks.
– METRALA (@playSHRAPNEL) November 28, 2023
Investigating the demand for neon machine
On November 13, Javarone reportedly named himself CEO of Neon Machine, removing the previous one from the studio’s executive board (although Long it states his current CEO status on Twitter).
Javarone is rumored to have taken over the studio in an attempt to erase its debts amounting to $45 million. In particular, he allegedly filed his company for Chapter 5 bankruptcy.
To regain control of the studio, Neon Machine’s founders (CTO Don Norby, CCO Colin Foran, COO Aaron Nonis, CMO Mark Yeend, head of business development Naomi Lackaff, and “former” CEO Mark Long) introduced a lawsuit in Delaware. Court of Chancery yesterday.
Within this legal filing, other people along with Javarone were apparently named as defendants, including 4D investor Steve Horowitz and Scott Honor of private equity firm Northern Pacific Group. Sources state that the document indicates that these investors are acting to maintain their majority control on the board, potentially exposing the company to liabilities worth tens of millions of dollars.
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*All financial/investment opinions expressed by nft Plazas come from the personal research and experience of our site moderators and are intended to be educational material only. People should thoroughly research any product before making any type of investment.
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