blockworks.co
A legal dispute among Gala Games’ top executives casts uncertainty over the blockchain gaming company’s future.
On Aug. 31, Eric Schiermeyer and Wright Thurston, co-founders of Gala Games, sued each other, alleging theft of company assets amounting to millions.
In his legal complaint, Schiermeyer alleges that Thurston and his investment entity, True North United, misappropriated $130 million in GALA tokens.
Although Thurston initially claimed the tokens would be securely stored for Gala Games’ benefit, he and True North later engaged in complex, deceptive transactions to transfer and either exchange or sell the tokens, the lawsuit claims.
Thurston was further accused of taking licenses for operating “nodes” in the Gala ecosystem, which generate GALA tokens, and selling them while pocketing the earnings.
Schiermeyer additionally referenced an SEC lawsuit against Thurston and his firm Green United, alleging that they deceived investors through an unauthorized investment offering known as “Green Boxes” or “Green Nodes.”
“Indeed, Thurston has founded numerous companies, most of which have ended up in litigation, insolvent, bankrupt, and/or sued by the SEC,” Schiermeyer’s lawyers said.
He also alleges that Thurston has been a largely absent director and has compensated himself at a rate more than ten times higher than what Schiermeyer has received.
In a counterclaim, Thurston accused Schiermeyer of mismanaging Blockchain Game Partners, the registered name for Gala Games, including the wasteful expenditure of $600 million in company assets.
Thurston further alleged he diverted millions in company funds for personal use and set up businesses in Switzerland and Dubai to capitalize on opportunities that should have belonged to the company.
The lawsuit also alleges that Schiermeyer operated Gala Games independently, ignoring Thurston, and denied both Thurston and his investment vehicle access to company records despite requests.
Schiermeyer and Thurston each seek to remove their counterpart as director of the company.
The Gala token has experienced an -25% over the past month and last traded at around $0.016 as of Monday at 7:00 am ET, near its 2023 open price.