Trending Now - Court Rules for Reinstatement of Subnautica 2 CEO Ted Gill
WHO:
President Trump, CEO Changhan Kim, CEO Ted Gill, cofounders Charlie Cleveland and Max McGuire, Unknown Worlds Entertainment, Krafton, Vice Chancellor Lori W. Will
WHAT:
The judge ordered Krafton to restore Ted Gill's access to the Steam platform.
The judge's ruling stated that Krafton breached the Equity Purchase Agreement (EPA) by terminating key employees without valid cause and improperly seizing operational control of Unknown Worlds.
The court decision indicated that the earnout formula is highly leveraged, requiring Krafton to pay $3.12 for each additional dollar of revenue generated beyond a revenue threshold of $69.8 million, up to the $250 million cap.
A judge ordered the reinstatement of CEO Ted Gill of Unknown Worlds Entertainment.
The court ruled that Krafton breached the Employment Agreement by terminating key employees without valid cause.
The July 1, 2025 Board resolution that led to the firings was declared ineffective.
The cofounders are now eligible to collect a $250 million bonus based on performance through September 15, 2026.
Krafton’s internal sales projections indicated that Subnautica 2 could sell over 1.67 million copies by Q4 2025.
A financial planning scenario predicted a total earnout payment of $191.8 million, with a best-case scenario of $242.2 million.
WHERE:
Delaware Chancery Court
WHEN:
The court ruling was handed down on March 16, 2026.
Krafton acquired Unknown Worlds Entertainment in 2021 for $500 million.
The earnout period extends through September 15, 2026.
The firings occurred on July 1, 2025.
WHY:
The court found that Krafton’s justifications for the terminations were "pretextual" and that the cofounders had been acting to protect the studio’s work product amid Krafton’s takeover attempt.
Krafton CEO Changhan Kim sought to avoid paying the $250 million bonus due to concerns over the contract terms.
The publisher claimed the cofounders were fired for failing to prepare Subnautica 2 for launch, which the court rejected as a pretext.
HOW:
Krafton CEO Changhan Kim initiated a month-long plan called “Project X” to create reasons for firing the cofounders, which included consulting ChatGPT multiple times for messaging strategies regarding the leadership change.
CEO Changhan Kim consulted ChatGPT to devise a corporate takeover strategy to remove the Unknown Worlds leadership.
Krafton attempted to justify the firings by alleging that the cofounders were working on unauthorized projects and stealing materials, which the court found to be unsubstantiated.
(UPDATED March 17, 2026 13:27 UTC)
In a significant court ruling today, a judge ordered Krafton to restore Ted Gill's access to the Steam platform, stating that Krafton breached the Equity Purchase Agreement by improperly terminating key employees and seizing control of Unknown Worlds. The court found Krafton's justifications for these terminations to be pretextual, noting that the cofounders were acting to protect the studio's work amid Krafton's takeover attempt. Additionally, the decision revealed that Krafton is required to pay $3.12 for every extra dollar of revenue generated beyond a threshold of $69.8 million, up to a cap of $250 million, as part of a highly leveraged earnout formula.
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(UPDATED March 17, 2026 07:24 UTC)
In a significant ruling from the Delaware Chancery Court on March 16, 2026, a judge ordered the reinstatement of CEO Ted Gill of Unknown Worlds Entertainment, stating that Krafton breached the Employment Agreement by terminating key employees without valid cause. The court declared the July 1, 2025 Board resolution that led to the firings ineffective, making the cofounders eligible for a $250 million performance-based bonus through September 15, 2026. Krafton had previously claimed the cofounders were let go for failing to prepare Subnautica 2 for launch, but the court rejected this as a pretext, finding no substantiated evidence for the allegations made against them.