Courtside: Sumail Loses Lawsuit Against Evil Geniuses And Peak6 On All Counts

The former player had made several allegations none of which were found sympathetic by a jury

After over two years of legal action a jury has found in favour of Evil Geniuses over their former player Sumail "SumaiL" Hassan on all counts. Hassan had lodged the complaint arguing that his former organisation had breached their contract when converting stock he held within the company from preferred units to common stock, supposedly without him understanding the gravity of that change. After days of presenting evidence and arguments the jury decided that neither Evil Geniuses – here in the suit under their companies EG LLC, EG Inc and EG Holdings – nor Peak6 had a case to answer.

The initial allegations related to stock that was given to the player at the height of his stardom. In September 2016 the organisation were keen to retain his services for the foreseeable future and presented Hassan with 400,000 shares in the company. In 2019 the organisation was acquired by the Peak6 Strategic Capital group and as part of that merger Hassan’s stock was converted into 265,338 units of common stock and 106,667 units of restricted common stock.

The suit initially alleged that at this time no-one except Peak6 members received Preferred units of stock. Preferred stock grants its owner superior rights to common stock, such as higher dividend payments and more robust claims to assets in case of liquidation. The suit also alleged that when Hassan’s stock was converted no-one from the Peak6 group explained the nature of these changes of the basis of arranging them this way.

As part of that new structure Hassan was given a renewed contract in August (that was backdated to May) that was set to run until August 2020. This contract was a generous one granting a $20,000 monthly salary to the player and a number of bonus payments. However after a 5th-6th place finish at 2019’s The International tournament it seemed he was deemed surplus to requirements and no longer wanted by EG. In September of 2019 Hassan was presented with an amendment to his player contract which he signed in order to be able to compete with other teams.

The amendment included a number of significant changes. While it freed Hassan of obligations to the organisation such as streaming and appearance duties, it reduced his salary to $2,000 per month and prevented him from competing at any competitions with his new team except the qualifier for the upcoming Dota Major. This amendment, and by extension his contract with EG, could be terminated for a one time fee of $125,000.

In November 2019 Hassan was then presented with a mutual release clause that would free him from any remaining contractual obligations. The suit alleged that this mutual termination agreement, unlike the previous contractual amendment, jeopardised his ownership stake within EG. They argued it “imposed harsh, unwarranted and draconian obligations and forfeitures” that later in the suit they deem to be unconscionable. They also stated that the agreement “contained numerous irregularities, discrepancies, and inconsistencies, as well as a number of ambiguous and/or unenforceable terms and conditions” and “sought to use the imbalance of bargaining power” in a bid to force Hassan to forfeit his stock.

In February 2020 the player was sent a proposed unit purchase agreement for his stock. The total value of the proposed purchasing price was $1 million, with a $300,000 initial payment and a deferment of the remaining possible $700,000. The contingency for that latter amount was that it would be paid in three annual installments starting on the day that the player officially announces his retirement. Hassan is only 24 years old and theoretically could have many years left in competitive play.

In summary the suit claimed Evil Geniuses did not provide “complete and accurate information” for Hassan in this purchase agreement. They conclude that Hassan “also never received any value whatsoever for his shares and/or units, despite his long-term commitment and dedication to EG and its esports operations. Put simply, Defendants took advantage of a young, naïve and vulnerable Plaintiff by presenting unconscionable and ambiguous terms in numerous proposed arcane agreements to Plaintiff in multiple attempts to strong-arm Plaintiff out of the well-earned benefits of his labors and talent.” Later in the suit they also alleged that Hassan was “coerced” into signing the termination agreement.

Evil Geniuses denied all allegations and their defence revolved around two points. The first was that at each stage of contract negotiations not only were the terms explicit but Hassan was directly instructed to consult with an attorney. The second was that arguing the organisation had behaved maliciously when they had offered generous financial terms and been flexible about previous agreements didn’t hold up.

The Peak6 and Evil Geniuses response also made a number of “requests for admission” that wanted Hassan to address several claims regarding their version of events. The first was that they asked him to admit that in a meeting with then CEO Nicole Lapointe Jameson he was advised to consult an attorney before signing anything, a claim which was denied on the basis that “the terms advised and consult are vague, ambiguous and therefore overly broad.” Several other requests for admission relate to rules around playing for other teams while having an ownership stake in EG, which were again denied on the basis that the “request calls for an expert opinion and/or legal conclusions” and again that the terminology is “vague, ambiguous and overly broad.” In total there were twenty-six requests for admission the majority of which were denied either flat-out or on the grounds that as discovery is being conducted it wasn’t possible to provide an accurate assessment at the time of the request.

With no ground conceded by either party the matter proceeded to a jury trial where the jurors were given lengthy instructions regarding how to assess each of the claims made against the defendants. Beginning on the 13^th February the verdict was officially filed on the 1^st March where the claims of breach of contract, breach of the implied covenant of good faith and fair dealing, false misrepresentation, false promis, breach of fiduciary duty, conversion and unclean hands were all found in favour of Evil Geniuses and Peak6. Naturally this means that Hassan walks away from the lawsuit with no awards of damages.

The victory represents a rare bright spot for the Evil Geniuses brand as they continue to downsize their operations with Peak6’s potential view to a sale and exit from the esports space. Having generated a slew of negative headlines regarding player and staff treatment, as well as much public criticism of their competency when it comes to running an organisation, they will at least be grateful that on this matter they have cleared their name successfully.