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Esports Entertainment Group’s Former Boss Sues the Company – Casino.org
Posted on: January 18, 2023, 07:13h.
Last up to date on: January 18, 2023, 07:13h.
The friction between Grant Johnson, the ousted CEO of Esports Entertainment Group (EEG), and the firm he as soon as led is getting hotter. Following his “voluntary” exit in December, Johnson is now suing EEG for thousands and thousands.
Esports Entertainment Group former CEO Grant Johnson in an interview. After leaving final December, he’s now suing the firm for breach of contract. (Image: Yogonet)
Johnson claims breach of contract on the a part of EEG. He submitted the go well with in the US District Court for the Southern District of New York, in search of damages of as much as $3 million, in keeping with court docket paperwork.
The lawsuit alleges that the firm’s termination of Johnson’s employment contract was based mostly on “contrived reasons” that fail to fulfill the necessities of a “for cause” termination. Johnson additionally asserts that EEG didn’t pay his wage, bonuses and severance pay as agreed in the contract.
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Johnson’s contract with EEG abruptly ended on December 3, 2022. At the time, the firm accused him of “fraud, willful misconduct, and/or gross negligence,” in keeping with his termination letter. The self-described entrepreneur and monetary companies skilled argues that EEG used that terminology in an effort to drive him to resign.
In Johnson’s view, there have been three essential causes he in the end needed to flip to a lawsuit to hunt restitution. One was the incontrovertible fact that EEG didn’t present 60 days’ discover, one other was that the allegations of “for cause” weren’t supported by proof and the third was that the allegations had been false.
As for the latter cause, Johnson claims that the board of administrators of EEG already addressed and dismissed the allegations. It unanimously agreed to not conduct an investigation into them in April of final yr.
Johnson acknowledged in the go well with that he has incurred losses, which embrace a money bonus of $450,000 per his contract. They additionally embrace $1.15 million, the equal of 200,000 shares in EEG that his contract supplied him.
EEG’s board of administrators requested Johnson to resign final month following a gradual 2022, for which it blamed the then-CEO. In the fourth quarter, it posted an adjusted EBITDA (earnings earlier than curiosity, taxes, depreciation and amortization) lack of $6.5 million.
Johnson has additionally acknowledged that, even when there had been indications of fraud, these don’t meet the threshold for dismissal per his employment contract. EEG refutes this, in addition to his different allegations.
This month, the board employed Spectrum Gaming Group’s Alex Igelman, the founding father of eSports consultancy agency Esports Capital Group, to take over. Igelman can also be the co-founding father of FairP2P, a “membership-based self-regulatory-organization focused on the oversight and governance of the monetized competitive peer-to-peer (P2P) skill-based gameplay,” in keeping with the firm’s description.
Complete Rewrite of Company Operations
The weak efficiency led EEG to shut up eSports online betting platform Vie.gg. It additionally needed to promote its Online Casino operations in Spain, in addition to shut Argyll iGaming in the UK and Ireland.
As of the center of January, the firm continues to conduct injury management and put the whole lot so as. It reportedly had solely $500,000 in money, however owed $200,000 to prospects at the finish of 2022.
The excellent news is that there might be some cash coming in quickly. The sale of its gaming property in Spain ought to conclude this month. If it does, it would ship $1 million to the firm. There’s an extra $1 million the nation’s Directorate General for the Regulation of Gambling holds on deposit.
Wherever potential, EEG will use extra proceeds to repay different money owed. It defaulted on a mortgage final October, and it wants to shut that hole to remain above water. However, if it isn’t in a position to full the asset sale in Spain, the firm’s future might be unsure.
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