The terminations and legal battle
In July 2025, Krafton terminated Cleveland, McGuire, and Gill, initially citing concerns about premature game release.
During litigation, Krafton shifted its justification, claiming the founders had abandoned their roles and improperly downloaded company data.
The court rejected these arguments, finding Krafton’s justifications “pretextual.” The contract defined terminable cause as an “intentional act of dishonesty” — requiring a conscious objective to deceive.
“Krafton failed to meet its burden,” the court wrote, noting that the founders’ role changes were transparent and the data downloads were defensive measures during a corporate crisis.
It ordered Krafton to immediately reinstate Gill as CEO with full operational authority, including control over Subnautica 2’s early access launch.