Real Problems With Virtual Money

(CN) - An owner-manager of a company that sells virtual currency to online role-playing gamers skimmed cash as "management fees," its co-owner claims in Cuyahoga County Court, Cleveland. GCN Technologies claims that Hayden Gill, sole member of co-defendant Glump Ltd., changed the company's headquarters without a member vote and diverted cash from the online gaming business MOG Sales.

MOG Sales - short for Massive Online Gaming Sales - was the brainchild of veteran online gamers who signed a deal in 2004, according to the company website. GCN says it owned 40 percent of the company, while Glump controlled 60 percent.

MOG Sales allows gamers to buy and sell the currencies and perks of online role-playing universes - including gold, power levels, upgrades, game cards and keys - which can be used in multiplayer games such as World of Warcraft and Mafia Wars.

GCN claims Gill abused his position as primary shareholder and manager by improperly classifying cash payments as "management fees" or "guaranteed payments," which he pocketed instead of divvying up and distributing to GCN.

His affiliates also raked in "substantial cash payments and other consideration and benefits" from MOG Sales, according to the complaint. Gill allegedly had the "sole and exclusive ability" to withdraw money from MOG Sales' Paypal account.

GCN demands more than $25,000, plus punitive damages, for breach of contract, breach of fiduciary duty, misappropriation of trade secrets and unjust enrichment, among other claims.

GCN says the parties are "hopelessly deadlocked," and MOG Sales needs to be dissolved and its assets sold to prevent "severe and irreparable harm."

Defendants include three entities allegedly controlled by Gill: Additive Interactive, HDN Enterprises and HKG Technologies.

GCN is represented by Walter Lucas with Weston Hurd of Cleveland.

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