It all boiled down to bad lawyering in the settlement agreement. Both sides alleged breach by the other side. LO claimed that D breached by not delivering all game assets, but then had to admit that delivery of all game assets was not specified in the agreement. D gave them to LO anyway after the claim, and so LO’s claim of breach was moot, as it had been cured even if it was technically not correct.
D claimed that LO was in breach because they wanted to define “net revenues” differently than had been specified in the agreement, arguing that they meant to say that it should reflect deductions for marketing, etc., that LO characterizes as ‘industry standard.’ Court didn’t buy that and went with the actual meaning of “net revenues” as not specifying any deductions. Therefore LO was in breach by deducting (or purporting to reduce, did they ever make any actual money?) from net revenues.
LO had a bad lawyer who did not define (1) exactly what was to be transferred from D to LO pursuant to the settlement agreement, or (2) exactly what LO thought should be “net revenues” (although I suspect they were trying to weasel a new definition after the fact). D had a bad lawyer who (1) failed to account for what should happen to IP work product in a lawsuit about nothing but IP work product, and (2) failed to specifically define what “net revenues” meant in the agreement (particularly since that definition was more important for his client).
Bad drafting makes for problems later on, which ironically can result in more revenue for weak lawyers, who will rarely admit their own deficiencies to the client. Good drafting is done by (likely) more expensive lawyers who must take accountability for their work product over the course of a long relationship with the client and therefore don’t want to be shown up by a judge in in this fashion. Both sides’ lawyers got pantsed by the court IMO.