Rick Fox will leave the esports company he founded and settle lawsuits he had been trading with his co-founders, according to documents filed in Los Angeles County Superior Court on Oct. 23.
Fox co-founded Beverly Hills-based esports team owner Echo Fox in 2015 with Amit Raizada, whose shares he acquired for $10 million in January 2019, making Fox the general partner.
Fox was previously sued by investors for mismanagement of the esports company, and he in turn filed a lawsuit accusing investors of misappropriating funds, among other allegations. The lawsuits are all expected to be dismissed and settled out of court.
The future of Echo Fox first came into question in September, when West L.A.-based Riot Games forced the ownership group to sell its valuable slot in the “League of Legends” Championship Series (LCS) esports tournament following an incident where Raizada used racist language when speaking with Fox and a co-founder.
Echo Fox investors, doing business under the name Eleven Stones, sued Fox in June over his failure to pay back a borrowed $5.1 million promissory note. The suit was later dismissed as Fox’s business partner (and SourceRock Partners investor) Khalid Jones bought the debt.
Fox was sued again in August by investor Stratton Sclavos, who filed the case on behalf of Echo Fox’s investors requesting Fox be removed as general partner of Echo Fox. The suit also sought to prevent Fox from receiving proceeds of the LCS slot sale.
In the August filing, investors claimed Fox “engaged in a pattern and practice of self-dealing and grossly negligent, reckless or fraudulent conduct in his management and operation of Echo Fox to the detriment of its limited partners.”
Sclavos is a founding partner of Beverly Hills firm Vision Esports, which invested $11.3 million in Echo Fox in early 2018. He was one of several Echo Fox backers named in the lawsuit Fox filed in early October.
The Riot Games championship slot ultimately sold to esports organization Evil Geniuses for $30 million. As part of the joint stipulation agreement filed, proceeds from the sale will be sent directly to an Echo Fox bank account in Florida, not an escrow.
The settlement “involves a change in ownership and reconstitution of the General Partner of Echo Fox so that, among other things, Fox no longer owns, controls or is involved in the General Partner,” the filing reads.
Raizada confirmed the suit dismissals and said in an email, “I am beyond thrilled by this settlement.” He would not comment on the future of Echo Fox as a company or esports competitor.
Fox did not return requests for comment.