Unknown Worlds Exec’s Legal Battle Against Krafton
▼ Summary
– Charlie Cleveland authored a document containing derogatory remarks about Koreans and a litigation strategy against Krafton, which he claims were transcribed from conversations with Owen Mahoney rather than his own opinions.
– The document suggested that taking the case to Delaware court would disadvantage Krafton and predicted the lawsuit would cost CEO Changhan Kim his job.
– It proposed that the co-founders could start a new company and rehire employees who might leave Krafton due to low morale after their termination.
– Krafton argued that the document demonstrates Cleveland had no genuine interest in working on Subnautica 2 or leading Unknown Worlds, despite seeking reinstatement.
– The trial concluded in November 2025, with post-trial proceedings scheduled for January 2026, awaiting the court’s final decision.
A major legal confrontation between Unknown Worlds Entertainment co-founder Charlie Cleveland and the publishing giant Krafton has escalated, with court documents revealing a contentious strategy memo that Cleveland authored. The document, titled “Litigation Help,” was presented as evidence in the ongoing trial and outlines a plan that Cleveland claims was transcribed from conversations with former Nexon CEO Owen Mahoney and other advisors. This memo suggests that taking the dispute to a Delaware court would severely disadvantage Krafton, predicting it would cost CEO Changhan Kim his position.
The submitted exhibit, which surfaced on social media via Game Developer news editor Chris Kerr, contains notes dated June 28, 2025. Cleveland confirmed under cross-examination that he wrote the document before his termination from Krafton but insisted the language reflects the opinions of others, not his own. He stated he was merely transcribing advice given to him, though he acknowledged choosing to record those viewpoints in his personal notes.
Within a section headed ‘Owen Mahoney notes,’ the document bluntly assesses Krafton’s legal vulnerabilities. It declares that pursuing the case in Delaware would leave the publisher “fucked,” adding that “a dissolution of any kind (marriage, company) is just a deal.” The notes advise the co-founders to “stop worrying about what anyone thinks of you,” warning that “when the big money comes on the line, the big knives will come out.” It starkly predicts the legal battle “WILL cost CH his job,” referring to CEO Changhan Kim, and that the chairman would be willing to “throw him under the bus.”
One particularly inflammatory line from the memo reads, “Delaware will say this is a bunch of sadistic Korean assholes,” a remark that has drawn significant attention for its derogatory characterization. The document also speculates that Cleveland, along with co-founders Max McGuire and Ted Gill, could potentially launch a new company and rehire employees who might leave Krafton and Unknown Worlds due to low morale. It references a precedent set by Patrick Söderlund, who founded Embark Studios after departing EA, suggesting that supporting displaced staff would earn “undying loyalty.”
The notes further anticipate widespread employee resignations, advising the executives not to “lose sleep over this” and to remain focused on elements within their control. It describes the situation as likely to “get a lot nastier” and includes sweeping generalizations about Korean culture, comparing the nation to “the Joe Pesci of countries” and alleging a tendency to shift from charm to hostility rapidly. The text claims that “male westerners” might find the situation “emotionally draining,” suggesting they are biologically inclined to be “problem-solvers” who “bring less emotion.”
Krafton has cited this document as proof that Cleveland lacked any real commitment to working on Subnautica 2 or managing Unknown Worlds. A company statement argued that the plaintiffs are “asking to be restored to jobs they were not doing, said they had no interest in doing, and had previously declined requests that they come back and do those jobs.” Krafton expressed confidence in its recent progress and eagerness to update Subnautica’s fan community.
The trial wrapped up on November 19, 2025. Both sides are now preparing post-trial briefs, with a post-trial argument scheduled for January 9, 2026. The court’s final ruling will be issued after these proceedings conclude.
(Source: Game Developer)
