From the GG WIki:
Leaving TSR
During his time in Hollywood, Gygax left the day-to-day operations of TSR to his fellow board members, Kevin and Brian Blume.
[9] In 1984, he discovered that TSR had run into serious financial difficulties.
[38] By the time he came back to Wisconsin in 1984, the company was US$1.5 million in debt.
[9] At this point, he hired
Lorraine Williams to manage the company. He engineered the removal of Kevin Blume as CEO in 1984, but the Blume brothers subsequently sold their majority shares in the company to Lorraine Williams.
[9] By this time, it was evident that Gygax and Williams had differing visions of the future of TSR, and Gygax took TSR to court in a bid to block the Blumes' sale of their shares to Williams, but he lost. In October 1985, TSR's Board of Directors removed Gygax as the company's President and Chairman of the Board. He remained on the board as a Director and made no further contributions to the company's creative efforts.
[39] Sales of Dungeons & Dragons reached US$29 million by 1985,
[5] but Gygax, seeing his future at TSR as untenable, left the company on December 31, 1985.
I was pretty much boxed out of the running of the company because the two guys, who between them had a controlling interest, thought they could run the company better than I could. I was set up because I could manage. In 1982 nobody on the West Coast would deal with TSR, but they had me start a new corporation called "Dungeons and Dragons Entertainment." It took a long time and a lot of hard work to get to be recognized as someone who was for real and not just a civilian, shall we say, in entertainment. Eventually, though, we got the cartoon show going (on CBS) and I had a number of other projects in the works. While I was out there, though, I heard that the company was in severe financial difficulties and one of the guys, the one I was partnered with, was shopping it on the street in New York. I came back and discovered a number of gross mismanagements in all areas of the company. The bank was foreclosing and we were a million and a half in debt. We eventually got that straightened out, but I kind of got one of my partners kicked out of office. [Kevin Blume, who was removed as TSR CEO in 1984.] Then my partners, in retribution for that, sold his shares to someone else [Lorraine Williams]. I tried to block it in court, but in the ensuing legal struggle the judge ruled against me. I lost control of the company, and it was then at that point I just decided to sell out.[37]
Before leaving TSR, Gygax had authored two novels for TSR's
Greyhawk Adventures series featuring
Gord the Rogue:
Saga of Old City (the first Greyhawk novel)
[26] and
Artifact of Evil. By the terms of his settlement with TSR, Gygax kept the rights to Gord the Rogue as well as all D&D characters whose names were anagrams or plays on his own name (for example, Yrag and Zagyg).
[40] However, he lost the rights to all his other work, including the
World of Greyhawk and the names of all the characters he had ever used in TSR material, such as
Mordenkainen,
Robilar, and
Tenser. In October 1986, Gygax resigned all positions with TSR, Inc., and he settled his disputes with TSR in December 1986.
[39] 
