Konami and Autumn Games made off with $14 million, says City National Bank
Looks like Konami and Autumn Games are due in court. City National Bank claims that the two companies defrauded the bank of funds totaling $14 million dollars related to the development of Def Jam Rapstar. According to City National, the two companies lied to the bank to secure Autumn a line of credit, claiming that revenue from sales for the karaoke title would cover the loans.
Instead, they made off with the money, and City National has yet to see a dime of payment on the $14 million in loans. Autumn Games also promised that they'd use a $1 million advance from Konami as a down payment on the loan. Instead, says CNB, they used it on other purchases.
"CNB has recently learned that the reputation of the defendants concerning financial conditions and repayment of the loan-both before and after the loan was approved – were false at the time they were made and that the defendants never had any intention of repaying the loan as promised," says the legal complaint. "Rather than paying game-related proceeds directly to CNB as agreed, the defendants have kept all game-related proceeds for themselves and have refused to remit any such proceeds to CNB. By the time CBN learned the true state of affairs, Autumn had drawn down $13,987,003.15 of the $15 million line…to date, the defendants still have not paid CNB a single penny of the principal amount that is due, and they continue to insist that none of the proceeds from sales of their title are owed to CNB and/or available for repayment."
Autumn Games RS I LLC, Konami Digital Entertainment Incorporated, CEA Autumn Management LLC, Alex Collmer and Jason Donnell of Autumn Games, and Does 1-25 are all named as defendants. Should City National Bank succeed in their case, they seek over $8.9 million in damages.
Source: Courthouse News Service
A gamer at heart, Nick started writing when he was a child. He holds a BA in English, works as a freelancer, and loves every minute of it. One day, he hopes to net himself a career in game design - but that's something for the future.
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