Lawyers to chase Mighty Kingdom’s ‘outstanding’ millions
Adelaide video game company Mighty Kingdom has hired lawyers to chase more than $2 million in settlement funds which it alleges are outstanding from a company founded by former CEO Shane Yeend.
Former Mighty Kingdom CEO Shane Yeend. Photo: Facebook
Specialist dispute resolution advisers LK Law have been appointed by Mighty Kingdom to chase down approximately $2.1 million which it says are owed to it by the gaming company’s largest shareholder Gamestar Studios.
Mighty Kingdom says the funds “have not been forthcoming despite efforts to resolve the delays”, with the announcement released just 18 days after Gamestar Studios founder Shane Yeend stepped down as CEO of Mighty Kingdom.
Yeend’s was a short-lived appointment at Mighty Kingdom – best known for its mobile gaming titles – and followed a strategic investment into the listed company which ultimately scored him the top job.
Gamestar’s outstanding contribution to a $7 million placement in August 2022 was $2.3 million, but according to Mighty Kingdom just $200,000 of that has been paid by Yeend’s company.
“MKL have appointed LK Law, specialist dispute resolution advisors, in conjunction with its existing financial and legal advisors to pursue and expedite an outcome that maximises value for the company’s shareholders,” said Mighty Kingdom, which is chaired by former ABC boss Michelle Guthrie.
“MKL is in a position to finance its ongoing business operations without immediate recourse to the Gamestar+ settlement monies.”
In a statement sent to InDaily, Yeend alleged Mighty Kingdom was in breach of its share subscription agreement with Gamestar Studios and that he had been trying to “get this deal completed for the sake of the game industry in Adelaide in good faith at all times”.
“Hence why I forced myself in as CEO for $1 a year in January to try and cut costs,” Yeend said.
“We will continue to work with the board and shareholders for the best outcome.”
Yeend was appointed as CEO on 3 May 2023, and resigned just four months later without much explanation from the Mighty Kingdom board. The company said it would “work with Mr Yeend in his role as chairman and CEO of Gamestar+ to resolve issues around outstanding obligations”.
As reported by The Advertiser in late-August, Yeend said there was a “legal issue” standing in the way of the payment.
The Gamestar Studios boss commenced in the top job in May, but was formally appointed in January to replace Philip Mayes.
At the time, the entrepreneur said he was “excited by the opportunity to lead the Mighty Kingdom team”.
“Delayed” payment from Gamestar – a company that was valued at $57.2 million in November 2021 and is developing interactive TV/board games based on properties like Family Feud – contributed to Mighty Kingdom declaring $2.7 million in cash outflows for Q3 FY23.
At that time, Mighty Kingdom had not satisfied all conditions necessary to secure the payment from Gamestar, but by June the video game developer announced all conditions were met, including the appointment of Yeend as CEO.
Mighty Kingdom also announced in June that “Gamestar has informed the Company that settlement of those Tranche 2 commitments is now forthcoming and will inform investors when this takes place”.