The Delaware Court of Chancery has released a new opinion in favor of ex-Unknown Worlds management, reverting control of the company and IP.
The new ruling has determined the parent company, Krafton, breached their contract after acquiring the developer back in 2021. The court ruled the dismissal of former Unknown Worlds CEO Ted Gill was made without just cause, and has ordered Gill be reinstated as CEO along with giving him control of the studio.
While Gill is being made CEO of the company again, the other co-founders of Unknown Worlds, Charlie Cleveland and Max McGuire, were not reinstated in their old positions.
Gill, Cleveland, and McGuire were originally dismissed after Krafton said they had prematurely released Subnautica 2, though it was originally planned for early access. They cited “a purported lack of game readiness” for the co-founders’ dismissal.
The lawfirm representing Gill and co. filed a lawsuit against this, after which Krafton reportedly changed tactics by saying Cleveland and McGuire had secretly entered semi-retirement, and that all three co-founders had downloaded massive downloads of company data.
The new ruling not only reinstates Gill as CEO but also gives him full control to Subnautica 2, including the right to distribute it in early access on Steam.
Furthermore, the ruling notes that one of Krafton’s main reasonings behind dismissing Gill and others was to avoid paying out a substantial $250 million bonus in earn-out payments.
As the studio earned more money and got close to the earn-out threshold of $69.8 million, Krafton CEO Chang-han Kim reportedly consulted with staff and even ChatGPT on how to avoid the payout.
“Krafton’s true focus in June 2025 was avoiding its financial exposure,” the judge wrote. “It knew Subnautica 2 was poised to achieve a $250 million earnout, which Kim viewed as a catastrophic failure. Krafton undertook “Project X” to either force a deal on the earnout or execute a “takeover” of the studio. Terminating the Founders was one tactic explored and ultimately chosen by Krafton to accomplish its goal.”
The new ruling also extends the calculation period for the aforementioned earn-outs by 258 days to compensate for the time period which Krafton dismissed Gill and others and took control of the studio.
Lastly, both parties have to submit a formal draft reflecting the new court decision within the next 3 business days.
Subnautica 2 is in development for Windows PC (via Steam, the Microsoft Store, and the Epic Games Store) and Xbox Series X|S.
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Author: 360 Technology Group
