A pair of lawsuits filed in Collin County and Dallas County District Courts late last year came to light on Friday, each revolving around an apparently nasty dispute between the former general counsel of Gearbox Studios (makers of the Borderlands and Aliens: Colonial Marines game series) and its CEO, Randy Pitchford.

A November filing by Gearbox, uncovered by Kotaku's Jason Schreier, alleged that the company's former general counsel, Wade Callender, "exploit[ed] Gearbox’s generosity and trust for his own personal gain." Callender's own countersuit, filed in the same court one month later, went quite a bit further. Callender's suit alleges that Pitchford "breached his fiduciary duties by exploiting Gearbox employees and property to fund Pitchford’s private cravings," and one portion of the suit makes two sensational accusations about Pitchford's behavior: that he accidentally left a selection of "underage" pornography on a USB stick at a restaurant, and that he used his company's money to host parties where "adult men have reportedly exposed themselves to minors, to the amusement of Pitchford."

The allegations about a USB stick places its discovery at a 2014 Medieval Times Dinner and Tournament location in Dallas, down the road from Gearbox's Plano, Texas, headquarters. Callender alleges in the December suit that someone from the restaurant perused the USB stick's contents upon their discovery and then contacted the game studio so that its employees could recover it. "Pitchford declared that the thumb drive was his and requested its prompt return," Callender's suit states.

At this time, Callender and other Gearbox counsel were "mediating yet another case in which Pitchford's conduct was front and center: the Aliens: Colonial Marines class-action." Callender alleges that while he was out of town, he asked Gearbox staffers in Texas to "make a copy of the USB drive, to ensure that its contents could be veriﬁed and, if necessary, acted upon." Callender was unable to see these files, he alleges, because "Pitchford intervened by retrieving the lost USB drive himself and ordering Gearbox personnel to destroy the copy that Callender requested."

Citing "information and belief," Callender alleges that the USB stick in question contained "Randy Pitchford's personal collection of 'underage' pornography," in addition to "sensitive corporate documents of Gearbox and business partners like Take-Two Interactive, 2K Games, Sega, Microsoft, Sony, etc."

Additionally, Callender alleges that Pitchford "syphoned Gearbox profits to fund parties thrown by Pitchford and his wife." The suit describes these parties, known as "Peacock Parties," as gatherings where adult male guests "have reportedly exposed themselves to minors, to the amusement of Randy Pitchford."

Liar? ✅

Con-man? ✅

Perv? No idea. — David Eddings (@davideddings) January 12, 2019

David Eddings, a former Gearbox vice president (and voice of Borderlands character Clap-trap) up until 2017, took to Twitter after Kotaku's report went live with a vague, two-word post: "It's true." [Update, 1/12, 3:30 pm ET: Eddings added a follow-up comment on his Twitter account, which we have since embedded above. It uses green-check-mark emoji to clarify his stance on the lawsuit filed against Pitchford: "Liar? ✅Con-man? ✅Perv? No idea."]

Callender's suit does not confirm whether law enforcement was notified about these allegations of sexual exposure to minors or the possible presence of child pornography on a USB stick owned by Pitchford. Neither Callender's legal counsel nor Gearbox representatives responded to Ars' questions as of press time. However, Gearbox did offer a statement to Kotaku on Friday: "The allegations made by a disgruntled former employee are absurd, with no basis in reality or law. We look forward to addressing this meritless lawsuit in court and have no further comment at this time."

Representatives from the Dallas FBI did not immediately respond to questions about possible investigations regarding child pornography and Pitchford. The Frisco, Texas, police department said it had no investigations involving Pitchford at this time.

Randy’s rebuttal: The porn was a “magic trick”

Bizarrely enough, Pitchford corroborates some of the story's details by appearing on a podcast that went live one day after Callender's suit was filed. On the December 22 episode of The Piff Pod, Pitchford talks at length about porn that he enjoys watching, including "camgirl" pornography, in which a host exposes themself to a live feed and takes requests and financial tips from consumers. Pitchford explained that he was "a consumer of this content." He confirmed that he copied a specific video "to this memory stick" to, as he describes it, "work out the method" of how a camgirl host faked the act of female ejaculation. (Be warned: he describes how the video looks in particularly graphic detail.)

"I realized, this is not a sex worker," Pitchford said on the show. "This is a fucking magician." Pitchford, for those unaware, has a vested interest in the field of magicians and owns the magic-focused Genii Magazine.

"This was before I learned I should probably have password-protected memory sticks," Pitchford says, before admitting that he had indeed left a USB flash drive at a Medieval Times Dinner and Tournament restaurant. "Some kid, an employee of Medieval Times, discovered this memory stick, took it home... and discovered secrets of my company and future games in development, and also discovered the pornography. It was 'barely legal' porn. This girl's handle was 'Only 18.'" The USB flash drive was returned to Gearbox, Pitchford says, in exchange for "swag" and video games.

Pitchford claimed that the flash drive arrived at the studio while Pitchford was on vacation, so his executive assistant checked its contents. "Before I know it, I think the entire office looked at it. And there was one piece of content on here. And it never occurred to any of them that the reason why there was just that single porno was because of the magic trick, not because of [pause] I don't know whatever the fuck they thought." Later in the podcast, Pitchford suggests putting this "Only 18" performer "on the cover" of a future Genii Magazine issue.

Claims about Media & Magic

Gearbox's November lawsuit filed against Callender seeks over $1 million in damages. It alleges, in part, that Callender did not fully repay a $300,000 loan issued by Pitchford in 2015 and that he used Gearbox's corporate credit cards for personal use before resigning from the company in July 2018.

Callender's countersuit seeks damages from both Pitchford and Gearbox Software "in excess of $1 million" on the basis of the defendants' "intent to defraud or harm" the former Gearbox general counsel. Callender's legal team claims these actions "destroyed [Callender's] property and pecuniary interests." The suit additionally alleges that Pitchford accepted a $12 million bonus from game publisher Take-Two Interactive to "Randy's side entity, 'Pitchford Entertainment Media & Magic," and that this happened "unbeknownst to Gearbox employees," thus placing a "financial burden" on those employees.

"Randy Pitchford is a manipulative and morally bankrupt CEO who shamefully exploited his oldest friend, a Texas attorney and military veteran named Wade Callender," the countersuit states.

Late on Friday, Pitchford posted a response to Callender's lawsuit on his Twitter account. "The attacks made by my former friend and colleague have no basis in reality or law," Pitchford wrote. "He is simply trying to shake me down for money. We will win, but because lawsuits are pending I can’t comment as much as I’d like. I am shocked by his lies. Thanks for your love and support."

Shortly after Pitchford's tweet, Gearbox replied to Ars' emailed request for comment without answering our questions. Instead, a Gearbox representative requested a "revision" of the article's headline and content. (The headline originally read, "After lawsuit filed, Gearbox CEO confirms he left USB stick of porn at Medieval Times," which Ars has tweaked slightly given the podcast was recorded before the lawsuit.)

"Though the podcast episode came out a day after Wade’s suit was filed, the actual recording (and telling of the story) was done before the suit was filed," Gearbox Publishing PR manager Austin Malcom wrote in an email.

Here, have the podcast

Still later on Friday, Gearbox PR forwarded a lengthy statement to Ars Technica regarding the December lawsuit filed against Gearbox and Pitchford. It begins with Gearbox's pledge to "file a grievance with the State Bar of Texas against our former general counsel for disciplinary proceedings." The statement questions Callender's "use of hedged lawyer language and clever application of quotation marks," then alleges that Callender is "clearly using deceit and lies to try to cause damage by promoting a narrative that he knows is false."

Gearbox's statement included a link to the same Piff Pod episode linked earlier in our report, thus apparently endorsing its statements on a corporate level.

The statement also describes something called the Peacock Theater as if it were an existing, publicly accessible arts venue ("owned by the Pitchfords and hosts a variety arts show that has featured some of the most respected and renowned performers in the world"), when it is in fact a private, invite-only event hosted at Pitchford's "massive house in a gated community." Gearbox claims that "every performance at the Peacock Theater is recorded" and invites members of the press to "watch any or all of these videos in private for further validation." (These videos' public release cannot happen without consent from the performers, the statement says.) We will follow up with Gearbox's offer to view these videos.

The company's statement concludes with the following: "Randy is shocked by the meritless allegations brought up by a former friend and colleague, to whom he has extended his personal funds multiple times to help him purchase a home, a car, and even fully finance his tuition and expenses for an executive MBA at Pepperdine."

Senior Gaming Editor Kyle Orland contributed to this report. This piece was updated after publication to include Pitchford's comments on Twitter and Gearbox's emailed statement.