Wed, Jul 24, 2013

Duff & Phelps Provides Expertise to Harmonix Music Systems in $533 Million Earn-out Dispute Victory

Managing Director Michael Braverman led a team that provided expert consulting services in a post-acquisition purchase price dispute matter involving the former stockholders of Harmonix Music Systems, Inc. (the company that developed the music video games Rock Band and Guitar Hero) and Viacom International Inc., which acquired Harmonix in 2006. Duff & Phelps was retained on behalf of Harmonix’ former stockholders; the firm worked with Harmonix’ legal counsel, Sidley Austin LLP, to perform accounting and financial analyses to determine the amounts supporting the multi-year earn-out. In December 2011, the former stockholders of Harmonix were awarded $533 million in earn-outs by an accounting arbitrator, who rejected Viacom’s arguments that no earn-outs were due. 

Viacom challenged this award and, in 2012, the Court of Chancery in Delaware confirmed the arbitrator’s decision. On July 16, 2013, the Supreme Court of Delaware upheld the Chancery Court and arbitrator’s decisions, marking one of the largest earn-outs ever awarded.