Unknown Worlds sues former leadership team for breach of employment and “fiduciary duty of care”

Unknown Worlds is suing its former leaders Charlie Cleveland, Adam McGuire, and Ted Gill for breach of equity purchase agreement, breach of implied covenant of good faith and fair dealing, breach of employment agreement, and breach of “fiduciary duty of care” in their capacity as directors.

Parent company Krafton sent GamesIndustry.biz a link to a heavily redacted copy of the filing in which the three former leaders of Unknown Worlds are accused of “openly threaten[ing] Krafton with litigation, and expressly demanding and prioritizing a release date for Subnautica 2, writing: “they demanded the Earnout, not the early access release that would best entice the gaming community into the Subnautica 2 world. Personal (not Company) goals were the priority for [them].”

Details of the legal complaint against Krafton, Inc. by the former leadership of Subnautica 2 developer Unknown Worlds became public last month. The complaint concerns a $250 million bonus payout tied to revenue targets for the 2025 Early Access release of Subnautica 2, which the former shareholders of Unknown Worlds Entertainment, represented by Fortis Advisors LLC – allege owners Krafton, Inc. sought to avoid paying out by delaying the game using “pressure tactics”. The publisher said it had “requested a delay” in releasing the highly-anticipated sequel in early access to “safeguard the quality of Subnautica 2 and maintain player trust.”

This subsequent lawsuit accuses the three former leaders of then threatening to self-publish Subnautica 2, “releasing it without Krafton’s backing, marketing, promotion, or distribution.” This, Krafton claims, left it with “no choice but to terminate their employment.”

The company also alleges that McGuire, Gill, and Cleveland downloaded tens of thousands of “company files” and emails in the lead up to these terminations. “These downloads were, by far, the largest downloads for each of the three Key Employees at any time since at least 2022,” Krafton added, and said the former leadership “refused” to return “or at the very least confirm” what devices and confidential information remained in their possession.

“When pushed, the Key Employees threatened to delete files and again refused to provide access to their devices containing Confidential Information for inspection,” the publisher added.

The 74-page complaint also reiterates Krafton’s former position that Cleveland and McGuire had “checked out” of developing Subnantica 2, leaving Gill unable to “overcome to complete abdication of the Subnautica 2 creative and technical leadership team.”

Read our timeline of the former Subnautica 2 leads versus Krafton here.