Esports Entertainment Group sued by former CEO for wrongful dismissal
Former CEO of Esports Entertainment Group Grant Johnson is suing his former employer for breach of contract and wrongful termination. The amount being claimed by Johnson is more than US$1million (£820,000/€920,000) as well as 200,000 shares of EEG stock with added costs of interest and expenses. This was revealed by the company in a recent prospectus for a share issue.
Esports Entertainment Group finances
EEG is facing financial troubles. The company released a statement that the amount of cash on hand this month amounts to just $500,000.
Background
EEG terminated Johnson’s contract citing accusations of fraud, wilful misconduct and gross negligence. The parties entered the employment agreement in September 2020 and Johnson’s contract ran until the end of 2025. Esports Entertainment Group did not compensate Johnson for any severance pay.
Johnson stated that EEG’s accusations of fraud are false.
EEG claim that the lawsuit did not threaten the future of the company and believe that Johnson’s expectations “are without merit”. It added that the lawsuit did not threaten the company and it intends to defend the accusations vigorously.
The board of directors of EEG previously investigated the issue in April 2022 and voted unanimously to stop the investigation.
EEG is considering the sale of some assets in order to pay its debts. This would include the brands SportNation and RedZone owned by Argyll, a subsidiary of EEG in the UK. Argyll was acquired by EEG in June 2020. The operator is now outlining its plans for winding down the business, which would include surrendering its licence to the Gambling Commission and refunding customer deposits.
In a statement the company said “As of 31 December 2022, approximately $200,000 still remained to be refunded to customers,” said the business. “Going forward, Argyll UK will comply with requests for refunds to the extent required by law and in accordance with Argyll UK’s terms and conditions.”
