Shrapnel’s ‘Neon Machine’ Files Lawsuit Over Hostile Takeover

A major lawsuit has been filed by Shrapnel’s game studio, Neon Machine. At the core of this conflict are claims of a hostile takeover by the company’s leading shareholder and the CEO of 4D Factory, Cort Javarone, who’s under scrutiny for ousting the CEO, Mark Long.

Making matters worse, Javarone and others are reportedly refusing to release equity to additional stakeholders, a move most commonly made to maintain a controlling stake within the company. The investors suffering losses include those that injected $20 million into Shrapnel last month, such as Griffin Gaming Partners and Polychain Capital. 

Staying positive during this moment of turmoil, Shrapnel asserts its dedication to rolling out early gameplay access as usual — in just weeks to come.

👀 pic.twitter.com/ep2rfnkeHG

— SHRAPNEL 🔺 (@playSHRAPNEL) November 28, 2023

Investigating the Neon Machine Lawsuit

On November 13, Javarone is said to have appointed himself as the CEO of Neon Machine, removing the previous one from the studio’s executive board (although Long affirms his ongoing CEO status on Twitter). 

Javarone is rumored to have taken over the studio in a bid to wipe his debts amounting to $45 million clean. Notably, he has allegedly filed his company for Chapter 5 bankruptcy. 

To regain control of the studio, Neon Machine’s founders — CTO Don Norby, CCO Colin Foran, COO Aaron Nonis, CMO Mark Yeend, the Head of Business Development Naomi Lackaff, and the “former” CEO Mark Long — filed a lawsuit at the Delaware Court of Chancery yesterday. 

Within this legal filing, other individuals alongside Javarone were apparently named as defendants, including 4D investor Steve Horowitz and Scott Honour from the private equity firm Northern Pacific Group. Sources declare the document indicates that these investors are acting out to maintain their majority of control on the board, potentially exposing the company to liabilities worth tens of millions of dollars. 

Want more? Connect with NFT Plazas

Join the Weekly Newsletter
Follow us on Twitter
Like us on Facebook
Follow us on Instagram

*All investment/financial opinions expressed by NFT Plazas are from the personal research and experience of our site moderators and are intended as educational material only. Individuals are required to fully research any product prior to making any kind of investment.