Ant Commandos sued by co-owners

Half of the peripheral maker's owners claim the other half committed fraud, embezzlement; dispute could put the company out of business.

In the latest in an increasingly bizarre series of legal disputes, The Ant Commandos is being sued by shareholders who own 50 percent of the company. According to the suit, the plaintiffs are seeking to have the courts dissolve the peripheral manufacturer entirely, forcing it to cease operations and managing the sale of its assets.

The Ant Commandos' recent run of court battles began last August, when Guitar Hero publishers Activision and RedOctane claimed its line of guitar controllers infringed on their trademarks. The Ant Commandos filed a countersuit against the two companies, claiming that the original Guitar Hero controller actually ripped off from a Magical Guitar peripheral made by Ant Commandos part-owner Topway Electrical Appliance in 1999.

The companies eventually settled that dispute, but it wouldn't be the last time they found themselves on opposite sides of a courtroom. Earlier this year, Activision named The Ant Commandos, former employees of RedOctane, and former RedOctane PR representatives Reverb Inc. in a lawsuit alleging that the defendants had been planning to start up their own competing company, and had even created a demo to shop around for fund raising purposes on Activision's dime. That case is scheduled to go to trial later this year.

In the latest suit, filed last month in the US District Court, Central District of California, Topway and Diana Yu--two shareholders who collectively own 50 percent of The Ant Commandos--claim the company and the owners of the other 50 percent of its stock--director of marketing Raymond Yow and president Hong Lip Yow--are guilty of unlawful business practices, breach of fiduciary duty, fraud, and an array of other charges.

According to the suit, Topway and Yu allege that the defendants sold products made by Topway competitors, withheld more than $500,000 in payments due to Topway, and inappropriately denied them access to its financial records. They also claim that Lip Yow misappropriated Ant Commando funds to purchase or lease luxury automobiles, and that the Yows dipped into the company kitty to pay for their personal attorney's fees.

In addition, the plaintiffs allege that the Yows started companies that would compete with The Ant Commandos and Topway. An attorney for Topway did not say if that charge was related to the suit in which Activision alleged that The Ant Commandos intended to establish a new development house with ex-RedOctane employees.

Furthermore, Topway and Yu claim that when they contacted the Ant Commandos' board of directors about these claims and asked them to file suit against the Yows, the board violated its fiduciary duties to the shareholders by refusing to pursue the complaint. The Yows' alleged improprieties, mismanagement, and fraud have cost The Ant Commandos and its shareholders more than $4 million, according to Topway and Yu.

Topway and Yu are also attempting to have The Ant Commandos business involuntarily dissolved. Under California law, when internal dissension between factions of shareholders results in a deadlock such that the business can no longer continue operating in the interests of the shareholders, the courts can intervene. The business is then sold under court supervision as a whole or in parts, with the proceeds going to creditors, shareholders, and others with a claim against the company.

As of press time, a representative with The Ant Commandos had not responded to GameSpot's request for comment.

29 Comments

  • unseentruth

    Posted Jun 25, 2007 2:41 pm PT

    TAC is a good company just not with its shareholders. But Topway the manufacture made a mistake, it changed the battery on the guitars and therefore they did not work in any sence. TAC sent out a letter to let people know what is up. But with lawsuits like these there are only very few people who know the truth and when the opposing party gets asked about what happened its only second nature to bash on the other party you see, so this couuld just be blown way out of proportion but who knows...

  • billyegg

    Posted Jun 25, 2007 2:35 pm PT

    you know, i like TAC. i'm rooting for them, and it sounds like they've gotten a raw deal. i've got some of their products, i liked the wireless guitar and amp. i hope they come out on top.

  • Cloud737

    Posted Jun 20, 2007 4:13 pm PT

    This has got to be one story that`s competing for first place in the world`s "strangest tales from the corporative world". In short, it`s one heck of a story!
    Let`s see now, a company in turmoil, barely breathing after numerous lawsuits, is yet again in another lawsuit, this time against it`s own shareholders that seek to erase the company for good. Moreover, the two sides here seem to be brother`s and sisters. The Yus vs the Yows. Wow, just like in some kind of fiction book.
    Well, either case, don`t care. They didn`t make anything remarkable so I don`t care if they go.
    Oh, wait, I do care how this turns out. This is actually a pretty great story, and amidst this heated battle I might actually understand more of the corporate world and have enough material to do a story based on these events.
    Whatever the case, I`m a bit eager to see what`s next.

  • jknight5422

    Posted Jun 20, 2007 3:29 pm PT

    The article is not about the guitar controller, it's about the two Yow brothers spending all the cash. They got Yu & Topway to invest in their stock & then they're running it into the ground by spending all the money on whatever they can. Most of the cash probably isn't their own either. LIkely, they will get prison time. Here's hoping!

  • comthitnuong

    Posted Jun 20, 2007 12:09 pm PT

    Doesn't sound like a smart thing to do. Not worth it to risk putting many people out of jobs.

  • Bgrngod

    Posted Jun 20, 2007 9:39 am PT

    Wow.. what is with all the Mafia type activities in the gaming industry as of late? Seriously.

    This may be a totally legit lawsuit, or it could be baseless. We shall see.

    I personally am suspect of the Ant Commandos business already. I have a hunch that some shady business is going on, and may have just been fingered.

  • PacoL250

    Posted Jun 20, 2007 8:01 am PT

    Hooray for lawsuits!

    Seriously now...this is just sad...

  • kragore

    Posted Jun 20, 2007 7:08 am PT

    Kfoss

    wow...ummm all this over plastic guitars..LOL Gibson should cash in and sign deals with all of them..LOL

    LMFAO good one mate lol i can see it Gibson: "the depition of the gibson sg in ant commandos' products is inacurate and does not contain minimal details....." hahahha

  • NandoSupes

    Posted Jun 20, 2007 6:39 am PT

    can companies make an honest living without suing and ripping each other off? lol!! I mean geez !! is all about the money these days.

  • AceCometh

    Posted Jun 20, 2007 6:38 am PT

    Nobody's ever heard of the Ant Commandos. If they're going to go out, they figured they'd rather burn out than fade away. But honestly.. no one cares.

  • EPaul

    Posted Jun 20, 2007 5:27 am PT

    ant commandos?

  • vaejas

    Posted Jun 19, 2007 10:31 pm PT

    Play nice boys. How come this kind of thing hasn't happened with Infinium Labs? Is there a cut off for the amount of corruption that qualifies?

  • Kfoss

    Posted Jun 19, 2007 9:55 pm PT

    wow...ummm all this over plastic guitars..LOL Gibson should cash in and sign deals with all of them..LOL

  • blueflamedino

    Posted Jun 19, 2007 9:10 pm PT

    has this company done anything worthy for anyone to give a damn

  • Pete5506

    Posted Jun 19, 2007 8:56 pm PT

    lol.... thats all I have to say

  • raedman

    Posted Jun 19, 2007 8:07 pm PT

    Yep, I'm pretty sure about it... :S

    What did they actually make?

  • Paul2004

    Posted Jun 19, 2007 7:52 pm PT

    Lmao , your right there raedman , They cant work together so 50% of the stock would be on the market , not counting the damage to there reputation . she is sinking , the shareholders are just waiting to abaondon ship

  • raedman

    Posted Jun 19, 2007 7:42 pm PT

    HAHA!!!

    Man, this companies sunk. When your shareholders start sueing you, you know you're beat!

  • YunalescaFFX

    Posted Jun 19, 2007 7:26 pm PT

    So how many Legal Disputes relating to video gaming took place this month again oO?

  • Paul2004

    Posted Jun 19, 2007 6:56 pm PT

    now this i didnt see coming , sueing your shareholders

    This is gettin wierd , first the big companys go at it now they are filling against there partners ? , what next , employee's sueing em ??

  • mike360xoxo

    Posted Jun 19, 2007 6:33 pm PT

    ...who cares?

  • Katosepe321

    Posted Jun 19, 2007 6:28 pm PT

    even if ant commandos win this suit, no one is ever gonna want to work with them again just because of how much crap has gone on with them.

  • lilmp89

    Posted Jun 19, 2007 6:20 pm PT

    ok...sue yourself out of a job....right..

  • VladimirCrow

    Posted Jun 19, 2007 6:14 pm PT

    WhaaaaaaaaaT?!

  • TooCool

    Posted Jun 19, 2007 6:09 pm PT

    Won't somebody pease think of the children!

  • DonutTrooper

    Posted Jun 19, 2007 6:08 pm PT

    Damn you knnth....If only I stopped you in time

  • bossjimbob

    Posted Jun 19, 2007 5:56 pm PT

    I think the 360 is better than the PS3 because...

    Just kidding, knnth.

  • knnth

    Posted Jun 19, 2007 5:53 pm PT

    I wonder if someone will manage to start a PS3 vs 360 debate here.

  • shanzor

    Posted Jun 19, 2007 5:52 pm PT

    Wow...when will the lawsuits end?

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