Rick Fox is a man of many talents; professional basketball, acting and standing up to racism. Last week, Fox made the decision to leave the company he founded, Echo Fox, due to the racist remarks of a shareholder, according to ESPN. Echo Fox is an esports organization named after Rick Fox under the funding of the parent company, Vision Esports.
“There have been incidents in recent weeks in which a limited partner of the Echo Fox organization, who is not an employee, officer or director of Echo Fox, used a racial epithet towards individuals both verbally and via email,” according to a statement from the organization, reported by ESPN. “One such incident was detailed in media accounts today. And although that incident was not directed towards an employee, officer, member or shareholder of Echo Fox, racial intolerance connected to Echo Fox is entirely unacceptable.”
So, why does Rick Fox have to leave an organization branded with his own name because of the racist implications of an investor with little involvement in Echo Fox?
According to ESPN, once the company was aware of the situation, they made various demands of the investor in question. One of these demands included the investor disassociating from the company. These demands clearly are a work in progress though, considering Fox’s departure.
“The shareholder disputes arising from Rick Fox’s unaddressed complaints to senior management at Echo Fox is a prime example of what happens when a founder’s concerns go unaddressed by senior management. Echo Fox is a private company, and therefore, we do not know the scope of Echo’s management’s obligations or Rick Fox’s rights,” says Raees Mohamed, partner at RM Warner Law, “However, Mr. Fox’s public announcement makes it clear that an ultimatum was made, and one which involved either management taking action or him leaving. Unless management does something between now and an acquisition of Mr. Fox’s interest, it’s clear he’s had enough and will leave. Fortunately, there is no litigation in this matter, to our knowledge. However, we can anticipate the possibility of litigation, if a swift transaction to Mr. Fox’s liking is not completed soon.”
Fox addressed the situation with shareholders in an email obtained by Dexterto,
“This is an official notification of my intention to exit the Echo Fox organization as a shareholder and participant as soon as I am able to facilitate a transaction to do so. The recent outrageous and abhorrent display of pure racism made by a significant Echo Fox shareholder as well as threats to my family have made it impossible for me to continue to remain associated with the company.
“I will not support or be associated with such behaviour and attitudes displayed at the shareholder level. Racism is an anathema to what my personal brand strives for and tolerating any form of discrimination such as this is not acceptable.
“This notification serves as the beginning process of exiting the company. I will be contacting all relevant and interested people. My position in the GP and the entity that owns my shares are available. Depending on the proposal there are different ways to structure a deal, acquire my entity, swap positions, etc. Interested parties can contact me. I’m moving on the first deal that sits well.”
If your company is dealing with corporate governance disputes, shareholder litigation, hostile takeover issues, or esports legalities, the lawyers at RM Warner Law know exactly how to help. Get in contact today.