Rick Fox, Founder of Echo Fox has filed a civil complaint against the organisation’s business partners citing new allegations of fraud, deceptive business practices, and racism.
Fox filed the lawsuit on September 30th in a Los Angeles County court, targeting Amit Raizada and Stratton Sclavos, seeking upwards of $10 million (£8.1 million) in damages and a jury trial.
The 162-page complaint cites an extended amount of cases and allegations against Raizada and Stratton, claiming that the two engaged in “a pattern and practice of self-dealing, deception and breach of every duty” around Echo Fox for their own benefit.
The legal suit is the latest in an ongoing chronicle of controversy surrounding Echo Fox that arose in April when Raizada allegedly directed racial slurs towards former Echo Fox CEO, Jace Hall. Since then, the state of the organisation has been in turmoil, especially around Echo Fox’s leadership, as Fox remains apart the team despite initially claiming he would step down.
Through this dispute, Sclavos sought a temporary restraining order against Fox on August 23rd, which was denied by the California court system. According to the latter complaint, Sclavos and other Echo Fox-affiliated signatories accused the three-time NBA champion of “willful, wanton, and intentionally destructive efforts toward the partnership.”
A major piece of collateral surrounding the discord came to a head when League of Legends game developer Riot Games forced Echo Fox to sell its LCS franchise slot or oust Raizada in light of his alleged racists remarks. This push resulted in the sale of its LCS slot to Evil Geniuses, which will return to League of Legends after a six-year hiatus in 2020.
Raizada’s lawyer, David W. Swift, issued a statement on Wednesday addressing Fox’s civil complaint: “Rick Fox’s lawsuit is a transparent attempt to divert attention from the train wreck he left behind at Echo Fox, where a supermajority of the Limited Partners in Echo Fox filed a lawsuit to remove Rick Fox and his company from the general partner role based on his self-dealing and grossly inept management.
“Even worse, the lawsuit is littered with categorically false allegations about Amit Raizada, Stratton Sclavos, and others. If Rick Fox wants to blame someone for Echo Fox’s failures, he should start by looking in the mirror.”
The exhaustive amount of claims in the complaint accuses the pair of exploiting the “kind heart” of Fox and putting the company in financial jeopardy, while decreasing its value as a result of Sclavos’ alleged “drug-fueled lifestyle” in addition to Raizada’s mishandling of Echo Fox’s monetary dealings.
The report cites that “Raizada began manipulating numbers behind the scenes to his benefit while Fox engaged publicly as the face of esports, spreading the gospel of esports on panels. Raizada’s fraudulent activity included self-dealing where he and Sclavos put Echo Fox into a tailspin by controlling the company’s debt.” The document also goes into additional details surrounding the racial slurs directed towards Fox and Hall, carrying on to claim that Raizada made personal threats towards Fox’s family.
Sclavos’ lawyer fired back in response to Fox’s civil complaint, claiming there has been no instances of financial foul play amidst the organisation: “Rick Fox’s lawsuit is a senseless diatribe replete with false and wholly unsupported accusations about Stratton Sclavos and Amit Raizada. . . Contrary to Fox’s propaganda, neither Sclavos nor Raizada misappropriated or misused any company funds. No monies paid to or for Raizada for his services were paid by Echo Fox or depleted any Echo Fox resources. Rather, Sclavos, Raizada, and their affiliates infused millions of dollars into Echo Fox over several years just so it could survive. Fox cannot say the same.”
The civil complaint states the Raizada and Sclavos had modified Echo Fox’s operating agreement in an effort to overthrow Fox, which now requires a supermajority vote from Echo Fox’s shareholders, in place of a court order. On August 21st, those shareholders came together to notify Fox he would be expelled from the company’s leadership position on October 21st.
Esports Insider says: The report adds yet another disturbing layer to an increasingly-hairy narrative within the Echo Fox organisation and its downfall. While it would be far too exhaustive to detail the complaint entirely, there’s no shortage of damaging claims to get to the bottom of. Things are currently no clearer in the public eye, that’s for sure.