Andreessen Horowitz-backed crypto gaming unicorn Mythical Games has filed a suit alleging that three former high-level executives violated their fiduciary duty by using company contacts and strategy to secure $150 million in funding.
Mythical Games filed the lawsuit in the Superior Court of the State of California in Los Angeles County’s Central District on Thursday. The suit names Rudy Koch, Chris Ko and Matthew Nutt of Fenix Games as defendants.
Koch, Ko and Nutt all worked at Mythical Games until departing last month. Koch was the company's co-founder, Nutt was chief operating officer and head of game studios and publishing, while Ko was a senior vice president for strategy and investments.
In its suit, Mythical Games, which achieved unicorn status late last year after hitting a valuation of more than $1 billion, alleges that the company put the three named executives in charge of raising money for a new fund called Mythical Ventures. The company alleges a Mythical Games investor introduced the trio to Cypher Capital, based in the United Arab Emirates.
Then, instead of securing an investment from Cypher Capital for Mythical Ventures, the three executives used Mythical Games’ business plan and convinced Cypher Capital to invest in a separate endeavor, according to the lawsuit.
Koch, Ko and Nutt did not immediately respond to requests for comment.
A new 'publishing platform'
A few weeks after departing Mythical Games, Koch, Ko and Nutt announced that they had founded a new “publishing platform” for blockchain games, calling it Fenix Games. They also said they had raised $150 million from Cypher Capital and Phoenix Group.
In its filed complaint, Mythical Games is seeking, among other things, “restitution of the ill-gotten gains” and “punitive damages.” The suit alleges the three former Mythical Games’ executives committed fraud through concealment while also breaching both their fiduciary duty and contract.
Mythical Games’ Head of Communications Nate Nesbitt declined to comment on details of the ongoing litigation, but provided a written statement by email.
“I can say that we believe very strongly in the protection of our intellectual property and corporate assets," Nesbitt said. "In this instance, it was necessary to take these steps to rectify this situation and protect the company’s corporate interest, as is our duty to our employees and investors.”
Los Angeles-based Mythical Games’s most recent round of funding also raked in $150 million. The round, led by Silicon Valley venture-capital firm a16z, also included NBA legend Michael Jordan, the National Football League’s investment arm 32 Equity and RedBird Capital Partners, an investor in Skydance Media.
Mythical Games' web3 gaming titles include Blankos Block Party and NFL Rivals.
© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.