From the sounds of it, 'a lot of money' is probably both an overstatement and also a value significantly less than 'money they invested into the company'.
If the CEO was going to get nothing which I strongly doubt, he should have just quit. Nobody would taint their reputation for zero return, Steve Perlman definitely would have made something out of this - it might not be a lot of money but I can almost bet that it is a hell of a lot more money than those who were fired and shafted received.
I think someone needs to orchestrate some kind of small-scale campaign to smear Steve Perlman from ever running any kind of company in the future.
The company build up value (patents etc.) and the employees get zero of that. Maybe the VC's are the problem, when they dictate terms when they have a higher preference than the employees (what is unjust to begin with), but also a CEO who allowed that. In this case he got nothing either, but has still some responsibility.
Gaikai was bought for 380m, i just don't get how OnLive can be worth less than the 50m investment.
Nobody came out a winner in this deal.