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The dispute between Tiny Metal creator and AREA35 CEO Hiroaki Yura and former employee Tariq Lacy over alleged embezzlement of Kickstarter funds has been settled in mediation court in Japan. Lacy has agreed to publicly apologize for alleging Yura embezzled from the Project Phoenix Kickstarter, calling the allegations "contrary to the truth."

Last November Japan-based video game developer Tariq Lacy accused Yura of embezzling money from Yura's 2013 Kickstarter campaign for the JRPG Project Phoenix to fund the development of a different game. Lacy made these accusations public by writing an extensive comment on the Project Phoenix Facebook page outlining the alleged embezzlement and explaining that this is the reason for Project Phoenix's numerous delays.

Yura denied the allegations and in a conversation with USgamer last year said that AREA 35 would be taking "civil and criminal actions," against Lacy.

On June 20th the Tokyo Court Civic Affairs appears to have reached a settlement. In the translated mediation document given to USgamer, AREA35 ("complainant company") and Lacy ("counterparty") agreed on a resolution. "The counterparty admits that the post/article/comment written on the 20th of November 2017 on the "Project Phoenix" Facebook Page, managed by the complainant company, is contrary to the truth and to apologize to the complainant company," reads the mediation document, referring to Lacy's November Facebook post.

In addition, Lacy was asked by the court to make a public apology on Facebook regarding the embezzlement allegations. The apology, as confirmed by AREA35, was posted on Lacy's personal Facebook page on June 19, 2018 in both Japanese and English. You can read the full English text below:

Lacy's Facebook post from June 19

In accordance with the Tokyo court’s decision, Lacy also agreed to pay 410,661 yen (~$3,700) to Masamichi Eguchi, vice president of AREA35 and guarantor of Lacy’s rent agreement. AREA35 also acknowledges its obligations to pay Lacy 600,000 yen (~$5,400) as part of a previous contract agreement.

With these payments and public apology, the mediation document states that “the complainants and the counterparty mutually confirm that there are no other obligations related to this matter[.]”

Project Phoenix

We spoke with Yura at PSX last year where he admitted that he didn’t want to make the matter with Lacy a large controversy. “I don’t want to make it big, because Sony doesn’t want us to make it big. It’s not an issue that really should have been a big issue,” Yura said at the time. Yura was showing off Tiny Metal at the time which was published through Sony Music's Unties label.

Yura acknowledged the delays for Project Phoenix. “I deserve some of the feedback I did get. Because the delay’s really bad.” Yura also said that Project Phoenix is “Definitely not dead” but there have been no updates to Project Phoenix since our interview.

AREA35 is currently working on a multiplayer update for Tiny Metal, AREA35's military strategy RPG designed as a modern successor to Advanced Wars. Tiny Metal launched on December 21 and is available on PC, PlayStation 4, and Nintendo Switch.