Former Gearbox Lawyer Accuses CEO Randy Pitchford Of Taking Secret $12 Million Bonus In Lawsuit Gearbox Calls 'Absurd' [UPDATE]

The former general counsel of game studio Gearbox (Borderlands, Aliens: Colonial Marines) and CEO Randy Pitchford are suing one another in a messy legal battle that sees both men accused of violating their legal duties to the company. The suit against Pitchford is full of sensational allegations, including the accusation that the Gearbox CEO received a secret $12 million bonus from publisher Take-Two Interactive as an advance against Borderlands profits.

Wade Callender, who served as Gearbox’s lawyer from 2010 until 2018, filed a suit on December 21, 2018 accusing Pitchford of violating various contracts involving both Gearbox and a separate real estate company that they both owned, as well as Callender’s own employment contract.

“The allegations made by a disgruntled former employee are absurd, with no basis in reality or law,” said a Gearbox spokesperson in a statement to Kotaku. “We look forward to addressing this meritless lawsuit in court and have no further comment at this time.”

Callender’s suit was filed one month after Gearbox sued him, in a separate case, for fraud and breach of fiduciary duty. Gearbox alleged that Callender borrowed money from Gearbox for a home loan and tuition that he did not pay back in full, and that Callender “abused the privilege of credit card access by charging unapproved, wholly personal expenses, including family vacations, gun club memberships and firearms accessories, and trying to get six-pack abs.” Gearbox also accused Callender of destroying evidence of the home loan agreement he made with the studio. You can read that suit in full below.

According to Callender’s lawsuit, which you can also read in full below, Callender and Pitchford were longtime friends (backed up by an old tweet from Pitchford) whose relationship fell apart over the last two years.

The lawsuit alleges that Pitchford struck a deal in 2016 to receive a “personal, secretive ‘Executive Bonus’ 0f $12,000,000 to be paid directly to Pitchford entity called ‘Pitchford Entertainment Media Magic, LLC.’” That bonus, Callender and his lawyers argue, is an advance upon royalties that would otherwise go to Gearbox’s staff. “This is particularly tragic exploitation,” the lawsuit states, “because these millions are being syphoned to Randy Pitchford’s personal accounts instead of funding the development of Borderlands.”

Callender’s most lurid allegation against Pitchford is an accusation surrounding an event that he says occurred in 2014. Callender says that Pitchford left a USB drive in a Dallas, Texas restaurant containing sensitive corporate documents for Gearbox and its partners including 2K Games, Sega, Sony, Microsoft, and others. Says the lawsuit: “Upon information and belief, Randy Pitchford’s USB drive also contained Randy Pitchford’s personal collection of ‘underage’ pornography.”

Several hours after the publication of this story, Ars Technica tracked down a magic podcast on which Pitchford had appeared last year. Around the same time, a Gearbox spokesperson also e-mailed the podcast to Kotaku. In an episode that went live December 22, 2018, the day after the lawsuit was filed, Pitchford told his version of the USB stick story—for the first time, he said. Pitchford described his enjoyment of “camgirl” pornography—in which a woman streams live erotic content—and explained that he had saved a porn video of a camgirl on said memory stick before it was lost.

“It’s a woman who is masturbating,” Pitchford said, “and when she has some experience that appears as if she’s having an orgasm, a huge amount of fluid comes out of her vagina.”

“This is not a sex worker—this is a fucking magician,” he added, saying he had purchased one of her videos and put it on the USB stick. “Some kid, an employee of the Medieval Times, discovered this memory stick, took it home, and accessed it because it was before we were password-protecting, and discovered secrets of my company and future games in development, and also discovered the pornography. And it was barely legal porn. This girl’s handle was ‘Only 18.’”

Gearbox also sent over a new statement several hours after the publication of this article:

Gearbox will be filing a grievance with the State Bar of Texas against our former general counsel Wade for disciplinary proceedings for filing a lawsuit that includes accusations that he knows to be untrue. The lawyer’s rules of professional conduct expressly prohibit the filing of documents that are knowingly false. The tell is within Wade’s claim itself – his use of hedged lawyer language and clever application of quotation marks betray that he knows that the impression he is trying to create is based in lies. We imagine that he used the quotation marks and lawyer language in hopes that will give him some angles of defense when we inevitably take action against him for false statements. Wade is engaged in a shakedown and he’s clearly using deceit and lies to try to cause damage by promoting a narrative that he knows is false.

Callender had also accused Pitchford of holding parties in which “adult men have reportedly exposed themselves to minors, to the amusement of Randy Pitchford.” In a statement sent to Kotaku several hours after the publication of this article, Gearbox also denied this, saying that Pitchford and his wife hold a regular variety show that’s recorded, and that nothing of the sort occurred there. “This is terminology that the Pitchfords have never used,” a spokesperson said—referring to the term “Peacock Parties,” to which the lawsuit refers—“and was made up by Wade in a further attempt to paint a sensational picture that is demonstrably false.”

The spokesperson added that this show “has featured some of the most respected and renowned performers in the world and has been attended by prominent members of the local community and larger media,” linking to various press coverage of Pitchford’s shows at his venue, which is called the Peacock Theater.

Gearbox, founded in 1999, is best known for the critically and commercially acclaimed Borderland series. The studio also developed Brothers in Arms and Duke Nukem Forever. Pitchford, an outspoken figure who has become renowned for his brash statements and love of magic, has courted controversy several times over the years, most notably for his statements on the critically panned Aliens: Colonial Marines. That game also became the center of messy litigation back in 2014.

You can read Gearbox’s suit against Callender here:

You can read Callender’s suit against Gearbox here:

Update (5:56pm): This story has been updated with new revelations and comments from Gearbox.

Update (7:20pm): We’ve updated again to clarify that Gearbox denies that the parties alleged by Callender existed.