Former Rockstar North President and Grand Theft Auto Producer Leslie Benzies left the studio in January, apparently deciding at the end of a lengthy sabbatical period that he did not want to return. But in a $150 million lawsuit filed against his former employers, revealed in a statement issued by Locke Lord LLP partner Christopher Bakes, Benzies claims he was “enticed” into taking the sabbatical, and that when he attempted to return to work in April 2015, he discovered that he had been locked out of the building.
Benzies’ suit (via GameInformer) states that he, along with Rockstar founders Dan and Sam Houser, were defined as the “Rockstar Principals—a privileged, connected, and financially equal group of three,” in a 2009 “Royalty Plan” that determined how their shares of company profits would be distributed. This agreement, and others that determined the nature of Rockstar’s leadership and the disbursement of profits, were headed up by Sam Houser, who Benzies “reasonably trusted and relied on… to be the exclusive negotiator and point of contact for him and the Rockstar Principals.”
“Mr. Benzies had no role in negotiations. Sam Houser repeatedly assured him that he did not need to take any role, since Mr. Houser was ensuring that his interests would be protected and, by virtue of Mr. Houser’s constant proclamations, that his financial rights would remain equal to his own,” the suit states. “This was borne out by performance under the 2009 Royalty Plan as the Rockstar Principals each received identical profit shares through 2014.”
But, the suit says, “While the Royalty Plan was structured to create the appearance that the Rockstar Principals were to be treated financially as equals, Take-Two, Rockstar, and Sam Houser now take the position that it does not.” Benzies claims Rockstar and Take-Two have “corrupted” the Royalty Plan to put him in a “grossly disadvantaged” position by denying him his portion of the shared profits: Between 2009, when the plan came into force, and the beginning of his sabbatical in 2014, Benzies and the Housers “received exactly equal profit shares, consistent with Mr. Benzies’ understanding of the plan.” After that, however, “Sam Houser interfered with [Benzies’] rights under the Sabbatical Agreement by directing an end to Mr. Benzies’ 2009 Royalty Plan profit shares,” estimated to be worth “at least” $150 million.
As for Take-Two’s role in the matter, it “breached its mediation obligations by issuing an out-of-bounds and inaccurate press statement regarding his sabbatical and that he would not be coming back to work,” the statement says. “In fact, when attempting to resume his duties upon conclusion of his sabbatical on April 1, 2015, Mr. Benzies found himself unable to enter the Rockstar North office because his facilities access device had been deactivated. After being let inside by building security, Mr. Benzies was then ordered to leave by the Rockstar North office manager without reason.”
In response, Take-Two Interactive and Rockstar have filed a counter-suit against Benzies, seeking a declaratory judgment that they have “no further financial obligations” to him under the terms of a Royalty Plan. They acknowledge that Benzies was one of the three Rockstar Principals but claim that bonuses are awarded based on a majority vote of the “Allocations Committee,” which under the terms of the Royalty Plan included two Rockstar Principals and one appointee from Take-Two. More to the point, it does not establish that Benzies is entitled to a “minimum allocation” of royalties, or that his share must be equal to that of the Housers, or anyone else.
Furthermore, because Benzies resigned “without Good Reason,” he is not entitled to any further royalties for his work; and even if he had resigned with good reason, or had been terminated without cause, the amount of his post-termination royalties, which he would be eligible to collect for three years, would be “determined solely by Sam Houser, the President of Rockstar Games.”
Take-Two said it has been in “ongoing discussions” with Benzies since he first demanded a bonus payout equal to that of the Housers, but the parties have been unable to reach a mediated resolution. It is thus now seeking a declaratory judgment establishing that the Royalty Plan doesn’t set any minimum bonuses for Benzies, and that even if Benzies had quit with cause (which the studio insists he did not), the amount of his post-termination payout would be entirely at the discretion of Sam Houser.
“A judicial determination is necessary and appropriate at this time and under these circumstances for the parties to ascertain their rights and obligations to one another and to avoid the hardship caused on the parties by a protracted dispute, further delay, and potential future actions for breach of the Employment Agreement or Royalty Plan,” Take-Two’s counter-suit states.
