Richard Garriott Files Lawsuit Against NCsoft

If you’d been reading the news and the official messages coming out of NCsoft and Richard Garriott’s camps at the end of his employment there, then you would believed that when Richard Garriott left the company the parting was sweet, sweet sorrow with hugs and kisses all around. But just under the surface there were a number of problems if you believe Richard Garriott’s recollection - now part of a multi-million dollar lawsuit. That recollection of the events leading up to and shortly after he left the company to “peruse other interest” are now in the public record courtesy of a lawsuit filed by the creator of ultima, Ultima Online and Tabula Rasa that alleges fraud and misrepresentation on the part of NCsoft.

The lawsuit alleges that NCsoft deliberately represented that Richard Garriott had left the company, when he had in fact be fired. This is the crux of his lawsuit because if he were to leave of his own free will it would give him a 90 day window to sell the NCsoft holdings he obtained when the company bought his game studio in . If he had been “let go” officially Garriott would have had a ten year window in which to sell those shares. Instead he was forced to sell his holdings in what he alleges was the worst time in history to sell.” The result was a tax liability incurred and a reduced return for his shares. Garriott is seeking some $27, 000,000 in damages from NCsoft. Garriott’s lawsuit alleges that NCsoft engaged in a breach of contract, fraud and negligent misrepresentation.

“Details about the lawsuit can be found in the complaint,” Cathy Conley, a represenative for Richard Garriott told us. “This is a dispute between Richard Garriott and NCsoft and we are confident it will be resolved in due course.”

A similar request for comment was sent to NCsoft, but did not comment as of this writing. More after the break.

Here’s a few choice excerpts from the lawsuit filed in Texas (gleaned from Game Politics:

In November 2008 Chris Chung, President of NCSoft’s North American operations, informed Mr. Garriott that NCSoft has decided to “part company.” Although Mr. Garriott objected to his dismissal, Mr. Chung insisted that the decision was final - Mr. Garriott had to go.

As Mr. Garriott prepared to leave NCsoft, however, Mr. Garriott learned that NCsoft had internally re-characterized his termination by Mr. Chung as a “voluntary” resignation… This mischaracterization had profound and detrimental effects on Mr. Garriott’s stock options: if NCsoft terminated Mr. Garriott’s employment (which it did) then the options - worth tens of millions of dollars - would remain in effect until 2011; but if Mr. Garriott resigned voluntarily (which he did not), then NCsoft might have terminated those options… within ninety days of his departure…

NCsoft forced Mr. Garriott into a Hobson’s choice of exercising his options… and forced him to sell into one of the worst equity markets in modern history…

Garriott claims that he not only lost millions by prematurely selling his options, but also incurred hundreds of thousands of dollars in tax liability associated with the unwanted deal.

Following the launch of the Tabula Rasa game, Mr. Garriott took a leave of absence… to pursue a different kind of launch… Mr. Garriott used the considerable media coverage surrounding his space-launch to publicize and promote Tabula Rasa for NCsoft. For example, Mr. Garriott send a coded message to the Tabula Rasa player base during his space launch…

NCsoft terminated Mr. Garriott’s employment while he was still in quarantine from his space flight…

we’ll have more on this story as it develops.