The civil suit by Fox follows legal action in August from one of his partners, former San Jose Sharks co-owner and VeriSign CEO Stratton Sclavos, who sought and was denied a temporary restraining order against Fox. In that attempt, Sclavos and other signatories affiliated with Echo Fox accused the former Celtic and Laker of “willful, wanton, and intentionally destructive efforts toward the Partnership,” according to that complaint.
Echo Fox, which was once seen as a paragon within the ever-growing esports industry for its traditional sports-inspired management philosophy and stylish Beverly Hills headquarters, has been embroiled in controversy since Fox threatened to leave the organization earlier this year as a result of racist email to another Echo Fox partner sent by Amit Raizada, another partner in the corporate structure surrounding Echo Fox. Fox’s lawsuit also cites threatening text messages sent by Raizada.
That text message resulted in Riot Games, the operator of the League of Legends Championship Series, demanding Echo Fox remove Raizada or sell its franchise slot in the lucrative esports league. The slot was later sold to another competitive gaming outfit, Evil Geniuses, for more than $30 million, according to a person familiar with the sale.
“Rick Fox’s lawsuit is a transparent attempt to divert attention from the train wreck he left behind at Echo Fox, where Rick Fox’s self-dealing and grossly inept management cost investors many millions of dollars and dozens of people their jobs,” said David Swift, Raizada’s attorney, in an emailed statement. "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 suit lists Raizada and Sclavos as defendants, along with a number of John Does, but Raizada is the focus. The suit alleges Raizada befriended him before engaging in complex instances of fraud, including using investor funds for his own personal use. According to the lawsuit, this included leasing a Beverly Hills house estimated at more than $20,000 per month, up to $100,000 in expenses that did not require company approval, and $350,000 in salary.
“I come from team dynamics. Not every teammate is a good teammate,” Fox said when reached by phone Wednesday. “When I started to see losing or illegal behavior, I had to call it out.”
The complaint says Sclavos received a $2 million loan from company funds after securing a large round of fundraising. When Fox and another business partner, Khalid Jones, took control of Echo Fox via a majority stake of the general partner in January of this year, the complaint says it had $6 million in debt, despite a $38 million raise by an entity Sclavos controlled only a few months prior.
“Rick Fox’s lawsuit is a senseless diatribe replete with false and wholly unsupported accusations about Stratton Sclavos and Amit Raizada," Linda McFee, Sclavos’s lawyer, said in an email to The Post. “Unfortunately, in the face of his impending removal as General Partner of Echo Fox for flagrant breaches of his duties to the company and its partners, this appears to be yet another attempt to deflect blame for Echo Fox’s failure from himself.” McFee also refuted the allegations that Sclavos and Raizada misappropriated or misused company funds, stating that “no monies paid to, or for, Raizada for his services were paid by Echo Fox or depleted any Echo Fox resources.”
Raizada has been the defendant in at least two other lawsuits alleging similar actions as those cited by Fox.
Fox remains in control of Echo Fox at least until Oct. 21, at which time a supermajority of 80 percent of the team’s shareholders could remove Esports LLC, which Fox and Jones control, as the general partner of the team.
This story has been updated from an earlier version to include comment from Raizada’s legal representation.