On Wednesday, a Delaware Court ruled in favor of Harmonix, the Cambridge interactive gaming company that created Rockband and Fantasia: Music Evolved, in a long-term dispute with Viacom over bonus payments. The media giant, which owns MTV Networks, must now pay $299 million that it owes to former stockholders, according to Polygon.
The two companies first went to court back in 2011, when Harmonix's former stockholders accused Viacom through an arbitrator. Viacom appealed the ruling under the claim that the arbitration agency had failed to include certain key pieces of evidence and that an arbiter lacked authority to rule on this particular issue. A year later in 2012, the case of Viacom vs. Winshall (Harmonix) was shifted to a lower court. Viacom yet again appealed the ruling, and requested a move to the State Supreme Court.
The higher court dismissed both of Viacom's claims yesterday. Unless the conglomerate makes the move to appeal the decision a third time to the U.S. Supreme Court, the decision will stand and the respective checks will be written.
The drama of this case emanates from Viacom subsidiary MTV Network's quick shut down, and eventual sale, of Harmonix's studio in 2010, just a few years after the startup was purchased in September 2006. The terms of the acquisition included "earn outs" to be made to former Harmonix stockholders depending on the studio's performance in 2007 and 2008.
While Viacom dished out $150 million in 2007, the company determined that it owed Harmonix stockholders nothing in 2008 (by then, Viacom had already abandoned the studio). Viacom also sought a refund of its earlier payout from 2007. Harmonix stockholders representative Walter Winshall fought the calculation, and the two companies went to an arbitration agency, which declared in December 2011 that Viacom owed Harmonix an additional $383 million from 2008 stockholders' payouts. Though Viacom agreed to give up $84 million of that sum to settle 2007 bonuses, the companies went to court to divvy up the remaining $299 million of 2008.
