(MENAFN- EIN Presswire) Breach of Contract East Side Games Group
East Side Games Group (EAGR) Served 100M Breach of Contract Lawsuit claims a calculated business strategy by EAGR designed to exploit developers of revenue.
East Side Games Group (TSX:EAGR)
PORTLAND, OREGON, UNITED STATES, December 19, 2022 /einpresswire.com / -- East Side Games Group (EAGR), formally known as LEAF Mobile Inc. and headquartered in Vancouver, British Columbia, Canada, was named in a lawsuit by Truly Social Games (TSG) in the United States District Court for the District of Oregon on October 28, 2022.
As previously reported, LEAF Mobile, Inc., who legally changed its name to East Side Games Group, Inc. in December of 2021, entered into a Membership Interest Purchase Agreement with TSG in June 2021. This Agreement is referenced throughout the court filing and was submitted with the civil complaint documents as Exhibit 'A.'
East Side Games Group (EAGR) Served 100M Breach of Contract Lawsuit
Under the factual allegations section, the court filing states, 'TSG specializes in the ability to develop online games that have a loyal and persistent player following. The games developed by TSG have a particular ability to generate substantial income from players based on design elements that encourage players to make in-game purchases.'
Statements in the court filing allege that 'In 2021 Leaf did not have the internal capabilities to develop and design the volume of games that it sought to publish. Accordingly, Leaf sought to partner with developers to generate the games that it sought to publish and monetize.'
The document states that 'TSG was willing to participate in the development of the games as long as Leaf, a publicly traded and well financed company, funded the development costs and agreed to share in the royalties of the games once released.'
According to the Agreement of June 16, 2021, 'Subject Titles' means four game titles with respect to which LEAF and the TSG Group have entered into development agreements and for which LEAF acts as publisher'. According to the Agreement, the subject titles include Archer: Danger Phone, Roll for Adventure: Idle RPG, and Bud Farm: Bud Master. The fourth game title mutually agreed upon by LEAF and the TSG Group in production and released as part of the Agreement was Trailer Park Boys: Get Merged!.
According to the lawsuit filed by TSG, 'On October 13, 2022, Leaf transmitted a letter to TSG purporting to terminate the Agreement and the parties' relationship thereunder.' The document also alleges that 'Leaf failed to cite any reason for terminating the Agreement.'
TSG also alleges that 'By attempting to terminate the Agreement while Leaf was in breach of the Agreement and while TSG was in full performance under the Agreement Leaf has breached, and continues to breach its duty of good faith and fair dealing under the Agreement.'
Another alleged breach of the original Agreement pointed out that actions made by EAGR affected the profitability of certain games and was explained this way in the documents, 'By failing to reasonably fund and support the development of the Subject Titles as contemplated by the Agreement, and by taking steps designed to harm the profitability of the Subject Titles, Leaf has breached, and continues to breach its duty of good faith and fair dealing under the Agreement.'
As stated in the legal filing, 'Leaf has been unjustly enriched to the detriment and impoverishment of TSG, not least by accumulating revenues and subscription fees that would have otherwise accrued to TSG and TSG's impoverishment is a direct result of Leaf's unjust enrichment.'
However, another allegation made within the lawsuit is gaining the attention of gaming industry experts. Within the court filing, the allegation is that 'Leaf has also attempted to surreptitiously acquire full control of the codebase for the Subject Titles without TSG's consent.'
The lawsuit filed by TSG goes on to explain that 'On information and belief, Leaf's attempt to appropriate the game that TSG developed and cut TSG out of any further revenue sharing arrangement is a calculated business strategy by Leaf designed to exploit developers for Leaf's benefit. Investigation by TSG has revealed multiple instances where Leaf has employed similar tactics to appropriate development work performed by others and cut developers out of the promised revenue share for online games.'
According to the court documents, EAGR employed these calculated tactics with the game Archer: Danger Phone and Bud Farm: Bud Master, both named as Subject titles in the original Agreement.
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Corin Cronin LLP of Seattle, WA, is representing TSG in this 100M Breach of contract lawsuit.
Case number 3:22-cv-01663-AR Filed in United States District Court for the District of Oregon.Patrick Tougas
Truly Social Games
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