Stemming from a lawsuit regarding alleged sexual harassment and the possible wrongful termination of an employee, Bobby Kotick, Activision's infamously outspoken chief executive, has lost his lengthy legal battle with powerful trial attorney Patricia Glaser over more than $1.4 million in unpaid legal fees.
The legal battle, which spurred from a 2007 sexual harassment lawsuit and transformed into a lengthy dispute between Kotick and Glaser regarding over $1 million in unpaid legal fees, came to an end on July 6th when a three-judge panel ruled in the Los Angeles-based attorney's favor.
The lawsuit in question originated with a flight attendant named Cynthia Madvig, who, in 2007, filed a lawsuit with the Los Angeles County Superior Court against Kotick, Andrew Gordon of LA's Goldman Sachs & Co.'s investment banking division, Cove Management, a company the two created to manage a Gulfstream III private jet that they co-owned together, and Phil Berg, a pilot employed by Cove.
According to the lawsuit, Berg had pressured Madvig to accompany him to dinners and outings during layovers as his "arm candy." When she declined, Berg had "set out to make life miserable for Madvig", asking the attendant to repeatedly clean toilets while "leering" at her. Madgiv, who claimed that she had submitted reports of such incidents to Gordon, said she never heard a response. Two months later, Kotick terminated her employment, citing that "the guys are unhappy with the hostile work environment."
Two months later, Madvig filed a lawsuit for sexual harassment, wrongful termination, failure to prevent sexual harassment, and retaliating against her when she reported the harassment. Kotick, Gordon, and Berg denied all the allegations in a report filed with then-attorneys Sullivan and Cromwell.
Kotick would later switch attorneys, bringing in Glaser's firm of Christensen, Glaser, Fink, Jacobs, Weil, and Shapiro. Said firm went on to inform Kotick that the lawsuit could be settled with a payment of $200,000 to $400,000, but the chief-executive declined, stating that he "believed no sexual harassment or retaliation had taken place and it was important to vindicate the principle even if it would be very expensive in terms of legal fees," according to the court records.
Come September 2007, Glaser and Kotick discussed what he and Gordon owed the firm for the legal fees. Kotick then reportedly mailed a check of $200,000 to Glaser with a letter stating it was full settlement of the firm?s fees and costs. Glaser disagreed, stating that the legal fees breached the $1 million mark.
Kotick, Gordon, Cove, and Berg would later go on to two additional law firms before eventually settling with Madvig in April 2008, paying her a $200,000 settlement, and $475,000 in legal fees.
The dispute regarding what Kotick and co. owed Glaser's firm eventually went into arbitration, with the final award being issued in Glaser's firm's favor. The firm was awarded $938,458, with $479,898 in legal fees and costs incurred in the arbitration, for a total of $1.42 million, as well as 10% interest.
Glaser's firm then sought to confirm the award in a California trial court, where Kotick's attorneys asked it be reduced by $111,753. The court denied the request granting Glaser's firm the full amount in April 2009. Kotick, Gordon, Cove, and Berg appealed the case, but as of July 6th, 2010, a three-judge panel affirmed the lower court's ruling.
It is unknown if Kotick, Gordon, Cove, and Berg will appeal the ruling.
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