Unraveling the Tangled Web: Rival Games' Downfall and the Alleged Role of Corporate Counsel

In a shocking turn of events, the online gaming platform Rival Games LLC and its co-founder Edo Cohen have filed a lawsuit against a group of prominent law firms and an attorney, accusing them of aiding in the destruction of the company's business partnership. The complaint alleges that corporate partner John "Jay" Coogan, currently employed at Pierson Ferdinand, played a pivotal role in a scheme to divert investments and cryptocurrency token grants away from Rival Games LLC, ultimately depriving the company and Cohen of millions of dollars.

Unraveling the Tangled Web of Allegations

The Accusations Against Coogan and the Law Firms

The lawsuit, filed in the Philadelphia Court of Common Pleas, claims that Coogan, while employed at various law firms, including DLA Piper, Ballard Spahr, and FisherBroyles, assisted Rival Games LLC's co-founder Shawn Murnan in setting up multiple corporate entities to drain assets, capital, and revenue away from the company. The complaint alleges that Coogan ignored the clear language in the Operating Agreement, which required unanimous consent from both Cohen and Murnan on important decisions affecting Rival Games LLC, and instead chose to only communicate with and follow Murnan's instructions, effectively freezing out Cohen.

The Dismissed Delaware Lawsuit and Its Aftermath

Prior to the Philadelphia lawsuit, Cohen had previously sued Murnan, along with several companies Murnan incorporated bearing similar names to Rival Games LLC, in Delaware federal court in October 2023. The claims included conversion, misappropriation of trade secrets, breach of fiduciary duty, and breach of contract. However, the case was dismissed without prejudice in August 2024, as the court found that Cohen's trade secrets claims were moot and that it lacked subject matter jurisdiction over the remaining claims.

Coogan's Alleged Role in Revising the Operating Agreement and Diverting Funds

The Philadelphia lawsuit delves into the specifics of Coogan's alleged involvement in the scheme. It claims that throughout his employment with Rival Games LLC, Coogan helped Murnan revise the company's operating agreement without Cohen's knowledge, drafting documents, agreements, and investment structures that allowed Murnan to redirect millions in investment money and cryptocurrency token grants away from Rival Games LLC and into Murnan's own companies, such as Rival Holdings LLC and Rival Ventures LLC.

The Alleged Manipulation of Rival Holdings LLC and the $3.5 Million Investment

The suit further alleges that in 2020, Coogan helped craft an operating agreement for Rival Holdings LLC, a company fully owned by Murnan, claiming that it owned a 95% share in Rival Holdings LLC. The suit claims that the existence and profitability of Rival Holdings LLC relied upon the intellectual property of Rival Games LLC, and that Cohen had not been involved in the creation of any licensing agreements.Additionally, the lawsuit claims that in 2021, Coogan developed a company share agreement for Rival Holdings LLC, then known as Rival Holdings Group LLC, to induce a $3.5 million investment from Ted Virtue. The suit alleges that Coogan "devised an investment structure such that Murnan retained exclusive control over the funds that the Virtue family were committing to Rival Holdings, to the detriment of Rival Games, LLC and Mr. Cohen."

The Alleged Deception and Breach of Fiduciary Duties

The complaint further alleges that Coogan knew the organization chart provided to Virtue contained false information about the status of Rival Games LLC and the transfer of its assets to Rival Holdings. Despite this, Virtue made the $3.5 million investment into Rival Holdings, a company in which neither Rival Games LLC nor Cohen had a financial interest.The lawsuit ultimately charges all the defendants, including the law firms, with negligence, breach of fiduciary duty, breach of contract, tortious interference with contract, tortious interference with business relationship, and civil conspiracy. It seeks compensatory and punitive damages, along with legal fees and interest.