Grant Johnson sues EEG for terminating his CEO contract

Grant Johnson sues EEG for terminating his CEO contract

The former CEO of Esports Entertainment Group (EEG), Grant Johnson, has launched a lawsuit against the company with New York courts, claiming wrongful termination of his position.

Filed in the New York District Court, the legal challenge claims over $1m in compensation and 200,000 shares in EEG stock due to the company terminating Johnson’s employment immediately and failing to provide 60-days notice, apparently a contractual requirement. 

Johnson was removed from his position as CEO and Chairman in December 2022 after EEG was hit by a series of unfortunate events, being replaced by Alex Igelman in the former role and Jan Jones Blackhurst in the latter. 

The former CEO claims that his employment in leadership of the esports and sports betting group active in both Europe and North America was ended for “contrived reasons despite a narrowly defined ‘for cause’ requirement”.

EEG’s ‘for cause’ reasons for removing Johnson were fraud, wilful misconduct, and/or gross negligence – however, the ex-CEO has decried the allegations as false and that, even if they were true, would not constitute cause due to a lack of ‘demonstrable and serious injury to the company’. 

The filing also asserts that EEG claimed fraud in company minutes, with the board of directors considering these same allegations on April 18, 2022, and “unanimously agreed that no investigation into Grant’s alleged actions from Ayrton lawyer was necessary”

2022 was a rough year in many respects for EEG, as the firm explained in its Q3 trading update that liquidity concerns were impacting its bottom line performance, requiring changes to its brand portfolio. 

This was followed by the closure of the Vie.gg sportsbook brand in the UK, Spain and New Jersey, whilst the British market also saw the withdrawal of the SportNation and RedZone Sports.

Commenting at the time of his dismissal, Johnson said: “It was decided last Saturday, when it was felt I was uncooperative in some objectives of the BOD, to dismiss me so here I am on the outside looking in. Putting my deep disappointment aside I would prefer to focus on the positive elements.”

However, in the new lawsuit, the plaintiff claims damages including the loss of the remainder of the current term of employment, compensation under two sections of the employment agreement and compensation already earned but not paid.

Specific damages are compensations of $300,000 plus a 3% annual increase on the two remaining years of Johnson’s initial term, a cash bonus of $450,000 related to company performance through 2021 and $1.15m corresponding to 200,000 shares. 

Source: SBC News