Last Friday, the court-appointed trustee charged with the task of tracking the finances of Acclaim Entertainment gave Judge Melaine L. Cyganowski a 47 page complaint. In at, New York State seeks nearly $150 million in damages from a group of former Acclaim executives - including cofounders Gregory E. Fischback and James R. Scoroposki.

The complaint contends that the “defendants abused their positions of authority and responsibility by operating Acclaim in many instances as if it were a personal piggy bank.” It goes on to say that the defendants “misrepresented profits and revenues in public filings with the Securities and Exchange Commission; paid each other undeserved salaries, fees and bonuses; allowed highly compensated directors and officers to pay themselves additional ‘commissions’ through third-party entities; violated Audit Committee standards by allowing members to receive fees from Acclaim; and placed their own personal financial interests ahead of their fiduciary duties to Acclaim.”

“The recent history of Acclaim is replete with directors and officers rewarding each other with rich employment contracts and bonuses despite the Company’s serious financial difficulties,” the document reads. “As a result of their stockholdings and executive positions, and despite Acclaim’s severe ongoing financial problems, defendants Fischbach and Scoroposki were able to secure employment contracts that provided them with rich salaries and benefits from Acclaim without requiring them to devote full or even passing attention to their Company duties.”

“Neither Fischbach nor Scoroposki had any obligation to devote any particular amount of time on behalf of the Company. Shockingly, Scoroposki, while he was employed by Acclaim, was permitted to earn fees from other companies, Jaymar and Jansco.”

In addition to the odd way of doing business, there were also some other irregularities such as: not paying taxes after August 31, 2001 and no preservation of financial records after filing for bankruptcy.

The trustee alleges tat the defendants compensated themselves nearly $150 million, which the trustee hopes can be gained via legal proceedings and redirected to the parties still owed by Acclaim

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