Ashes of Creation director Steven Sharif breaks silence in ongoing legal battle

The legal battle around Ashes of Creation is unlikely to settle in any clear way soon, but we’ve just received a significant update courtesy of a fresh statement from Intrepid Studios founder Steven Sharif, who was also game director on the now-abandoned MMORPG. Lawsuits are ongoing in both directions, with Sharif and investor group TFE Games Holdings both filing claims against one another in February. In his new statement, Sharif claims that a court order granting a Temporary Restraining Order shows support for his accusations against TFE. He also takes a moment to address questions about his financial involvement in AOC, and state his frustrations with what he calls “a victory lap” for the game’s skeptics.

Before we get into Sharif’s latest statement, it’s important to be clear that this is just one side of a much deeper and more complex series of ongoing legal battles taking place in the wake of the dramatic shutdown of Ashes of Creation, Sharif’s resignation from Intrepid, and mass employee layoffs, which were confirmed at the beginning of February. A group of affected staff have filed a lawsuit against Intrepid Studios, alleging that its actions during the shutdown violated the WARN Act (Worker Adjustment and Retraining Notification) of California, which requires “employers to give 60 days notice before a mass layoff, plant closure, or relocation.”

Sharif and his husband, John Moore, are currently being sued by TFE Games Holdings, which currently holds the assets for Intrepid Studios and Ashes of Creation. TFE’s lawsuit alleges that Sharif has refused to hand over important company records despite request, and that he did not warn the board of an incoming credit claim for its Steam revenue. It also accuses Sharif of “misappropriating” millions of dollars in funds, with the suit claiming it believes these were used for “personal expenses” instead of AOC’s development.

Sharif has since filed his own counter-lawsuit against TFE, along with named investors Robert Dawson, Ryan Ogden, Theresa Fette, and Aaron Bartels. This alleges “a campaign to extort control of Intrepid” from Sharif, and of “deliberately starving Intrepid of cash to manufacture justification for a foreclosure by TF.” Sharif is seeking to prevent TFE from “accessing, using, or selling” Intrepid’s IP and assets, to undo the foreclosure that transferred ownership to TFE, and to remove the defendants from the Intrepid Studios board.

With legal proceedings underway in both directions, things have been quiet for a few weeks. But now Sharif has reared his head again in dramatic fashion, posting a lengthy statement to both the game’s Reddit page and its Discord server. “Over the past month, many of you have noticed that I have been largely silent,” he begins. “For a community and team that I spoke with almost daily during development, I know that silence has been unusual and difficult. It was not because I had nothing to say, quite the contrary.” He states that he decided to ensure that proceedings would play out “in court, where the facts matter and where evidence would determine the outcome.”

Sharif claims his resignation on Monday January 19 came about “because I was unable to prevent the wrongful decisions of the board, especially their plans to summarily fire the employees without their legally entitled pay.” He again accuses the “bad actors who gained control of the board, went rogue, and abandoned both the company’s mission and their obligations in pursuit of their own interests.”

Sharif celebrates “our first legal victory with the federal judge in San Diego,” referring to a temporary restraining order (TRO) that has been granted, preventing the defendants “from accessing, using, selling, distributing, or causing anyone to access, use, or distribute the trade secrets of Intrepid.” It’s important to note that a TRO is, by definition, temporary, and is frequently standard practice while a case is ongoing to prevent any potential movement. A similar motion for a TRO has also been granted in TFE’s lawsuit against Sharif.

Nevertheless, Sharif is pointing to comments made by Judge Linda Lopez in the ruling as a nod in his favor. The statement reads, “The Court finds the balance of hardships tips sharply toward Plaintiff,” referring to Sharif. “Intrepid has already suffered harm to its business and reputation from the likely unlawful Article 9 foreclosure and sale of its assets to TFE. TFE is poised to access the Trade Secrets Materials and then sell them to a third party with Ashes of Creation. Even if TFE keeps Ashes of Creation to develop itself, Intrepid will have lost its primary valuable asset and any chance of bringing Ashes of Creation to market itself.”

The Judge then asserts, “A TRO to preserve the status quo while the ownership of the assets is determined will not harm Defendants and will prevent the destruction of their secrecy or their complete loss in a sale to a third party.” As I mentioned earlier, we’re almost certainly looking at a long road ahead for these lawsuits to play out, especially given that they’re taking place in both directions. It’s important to not draw decisive conclusions in favor of either side while that happens.

In his latest statement, Sharif claims, “I categorically deny accusations suggesting that I mismanaged company funds, caused the company’s shutdown, or engaged in any misconduct. Those claims attempt to rewrite the events that actually occurred and divert attention away from the decisions the board and its cronies made. The truth is that I refused to participate in actions I believed were unlawful and destructive to the company, its investors, its employees, and its future. Since the shutdown I have been fighting as hard as I possibly can, in court, to show that the board’s actions were wrongful and to fight for the rights and interests of the developers, shareholders, and the player community.”

Sharif also responds to speculation about the nature of his own investments into Ashes of Creation. “From the beginning, I said that I was personally financing the project, and that statement is true.” He claims, “Much of the capital provided to the company came through lenders who extended financing based on my personal guarantees and the collateralization of my own assets and equity. The risk was mine personally. If the project failed, those obligations did not disappear, they were my responsibility. I put my own financial future on the line to build this project and keep it alive for as long as possible.”

All we can do for now is wait as more hearings take place and further details emerge. Sharif admits that “Ashes of Creation has always had skeptics and critics,” and says that it has been “difficult” to watch events play out. “The past several weeks have felt like a victory lap for many of those skeptics, people celebrating what they believe is the end of a project they doubted from the beginning.”

He also says that the response to the game’s launch on Steam in December “dramatically exceeded expectations,” and “was demonstrating real momentum.” Sharif claims that it “generated nearly $9 million in gross sales, reached roughly 300,000 monthly active players, had approximately 400,000 additional [player wishlists], and millions of registered accounts. Most importantly, the game achieved an approximate 76% peak concurrent user retention rate on day 30.”

In closing, Sharif writes, “What has been most painful to watch is the attempt to rewrite the story of this project while the people who actually dreamed it, worked for it, and built it have been pushed aside, and in my case, threatened, defamed, and unfairly blamed. Ashes of Creation was never just a corporate asset to flip. It was ten years of work by hundreds of developers and the belief of a community that helped bring it to life.”