Echo Fox co-founder and former NBA star Rick Fox has filed a lawsuit against multiple of his former partners at esports organization Echo Fox for instances of fraud. Fox is seeking tens of millions in damages, NBC Los Angeles reports.
The fall of Echo Fox: a brief history
In April, journalist Richard Lewis broke on Dexerto the story of Echo Fox minority co-owner Amit Raizada (one of the partners specifically named in Rick Fox’s lawsuit) using racist language towards Twin Galaxies’ Jace Hall in company email. At the time, Echo Fox was still a franchise in League of Legends’ LCS league and with the scandal brewing, Riot Games stepped in to issue a 60-day ultimatum to Echo Fox to solve their internal issues and remove Raizada from the table.
Echo Fox couldn’t come to a solution within the given deadline plus another week-long extension, so their LCS slot went up for a sale. Kroenke Sports & Entertainment — the owners of Overwatch League franchise Los Angeles Gladiators — came close to locking the purchase, but a lawsuit conundrum of their own forced them to drop out of the deal. Echo Fox’s LCS slot eventually went to Evil Geniuses.
This completely removed Echo Fox from League of Legends, but the conflicts between its partners were not easily resolved.
Rick Fox vs. Raizada and partners
While Rick Fox spoke against Amit Raizada’s persona on several occasions, Raizada himself retaliated, sharing his side of the story, disputing many of the allegations towards him, and claimed that Rick Fox’s financial mismanagement of the entire org further complicated Riot Games’ investigation.
“The email started an investigation,” Raizada told Upcomer’s Kevin Hitt in August. “The material breaches that occurred with Echo Fox were that they did not have $5 million dollars in liquidity, had a loan over $1 million dollars, and when Rick converted investors from debt to equity, there were some that become more than 10% owners. You cannot give away more than 10% without prior approval from Riot.”
Later the same month, Upcomer further reported that the majority of Echo Fox’s limited partners (83 percent) are likely to seek Rick Fox’s resignation, after prolonged negotiations about the LCS slot sale. At the time, Fox leaned towards Allen Shapiro’s The Shapiro Group, while the majority of limited partners were leaning towards Peak6, the parent company of Evil Geniuses.
That story received a follow-up in September, as ESPN’s Jacob Wolf confirmed that Echo Fox’s limited partners will indeed ask for Fox’s resignation for working “against the best interest of the company and his partners”. Among those that have signed the latter are Amit Raizada and Vision Esports head Stratton Sclavos — two of the names Rick Fox has named in his now-filed lawsuit.
Rick Fox’s lawsuit and what does it claim?
According to NBC Los Angeles, Rick Fox claims in his lawsuit that Amit Raizada has “used investor funds for personal use in a complex scheme that has left the company on the brink of ruin”. As for Stratton Sclavos, Fox alleges that the latter has taken a “$2 million personal loan from the company after helping raise funds from a group of investors”.
Both Raizada’s and Sclavos’ lawyers have spoken out, saying the lawsuit is nothing more than an attempt to shift blame from Fox to his two partners.
“Rick Fox’s lawsuit is a transparent attempt to divert attention from the train wreck he left behind at Echo Fox,” Raizada’s attorney David Swift said. Sclavos’ lawyer Linda McFee added:
“Rick Fox’s lawsuit is a senseless diatribe replete with false and wholly unsupported accusations about Stratton Sclavos and Amit Raizada.”
The story is developing.