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African-American software company sues Sony Corp. for close to $500 million.

SAN DIEGO--(BUSINESS WIRE)--Dec. 19, 1996--

Park Place Productions Inc. vs. Sony Corp. Inc.

Superior Court Case No. 694365

Park Place Productions Inc., an African-American-owned business once recognized as the largest independent computer entertainment software developer in the country, recently filed a lawsuit in San Diego Superior Court naming several Sony subsidiaries and representatives as having taken part in an attempted hostile takeover of the company in December 1993.

According to the complaint, which claims damages in excess of $90 million and punitive damages of $300 million, Sony solicited the services of key Park Place personnel in a plot to lure away Park Place's coveted sports software development teams, the center and heart of the company.

Based locally in San Diego, Park Place Productions is the name behind the design and development of more than 70 video-game and software titles, which included best-selling, top hit video games such as the original "John Madden Football," "Monday Night Football," "NHL Hockey" and "Joe Montana Football" for various game platforms, including the Sega Genesis and Super Nintendo Entertainment System.

Its founder and chief executive officer, Michael Knox, the 1993 recipient of the prestigious Inc. Magazine's Entrepreneur of the Year award for the software category and successful African-American businessman who built his dynamic company with $3,000 and a credit card, met with Sony representatives in December 1993 to discuss Sony's overwhelming interest in purchasing Park Place Productions.

However, in the midst of a break in negotiations during the Christmas holidays, Sony put an alternate plan into effect. Covertly, Sony representatives met with more than 30 Park Place Production employees and, with Sony's assurance to provide indemnity, allegedly convinced these employees to illegally enter the Park Place complex and remove Park Place's computer equipment, software and proprietary trade secrets.

Within days of the raid, Sony Imagesoft (now Sony Interactive Studios America) opened a new software development site in Sorrento Valley, just a few miles away from the Park Place complex. This new site was entirely manned by the former Park Place employees, including two of Park Place Productions' key sports development teams, with Park Place's former in-house counsel at the helm.

This Sony site is the current location of Sony's sports software development teams for the Sony PlayStation.

Representatives of Park Place Productions and Knox commented briefly in a recent interview that "at the time, the consumer video game market was only a $4 billion-a-year industry, and we were the leaders in sports video game development. Sony dangled a $30 million offer for the purchase of the company.

"And, while Sony executives were negotiating with us, they secretly hired away key company officers and employees who met with them over the Christmas weekend. Once indemnified by Sony, employees returned to Park Place on the night after Christmas to rape and raid the company of its remaining resources, hardware, software and proprietary source codes. The Sony conspiracy and raid dealt a serious blow to Park Place.

"Once Sony set its mind on taking our company's sports development teams, there was very little we could do to prevent it. Sony pillaged and plundered Park Place, taking our company's most valuable assets, our intellectual property, cutting out the heart of our company. We believe that Sony attempted to break the African-American entrepreneurial spirit by dealing unfairly with Park Place Productions, an African-American-owned business."

Park Place is represented by Williams & Gilmore, APLC, a local La Jolla, Calif., law firm specializing in complex business transactions, and corporate and entertainment law. Gerald E. Sarte, an attorney at Williams & Gilmore, acknowledged, "Park Place Productions was a proven company, recognized for its reputation for creating the best sports software in the industry.

"Sony was looking to put together an in-house development team to produce exclusive sports titles for the new 32-bit Sony PlayStation. Acquiring the Park Place development teams allowed Sony to accomplish that task practically overnight, but the tactics they utilized were questionable.

"They brought the development of Park Place's other projects to a halt, thereby severely weakening the company and reversing its growth. And this was no small company. With a staff numbering over 120 employees, Park Place Productions was generating millions in revenue each year.

"Park Place Productions was the largest and most successful independent computer entertainment software developer in North America, and it just happened to be an African-American-owned minority business. Nevertheless, Sony must be held accountable for its actions. To this day, Sony continues to develop sports and entertainment at their new facility in San Diego, employing and utilizing the services of ex-Park Place Productions personnel."

CONTACT: Williams & Gilmore, APLC, La Jolla

Gerald E. Sarte, 619/552-6880

619/455-1514 (fax)
COPYRIGHT 1996 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1996, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Publication:Business Wire
Date:Dec 19, 1996
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