Polygon has reported that the producer of Section 8 and co-developer on Aliens: Colonial Marines, TimeGate Studios, has filed for Chapter 11 bankruptcy protection. The petition was filed at the Texas Southern Bankruptcy Court this past Wednesday, May 1st.
The report also notes that the petition lists less than 50 creditors to which TimeGate owe money, including Epic Games, Agora Games and DJ2 Entertainment. Section 8 publisher Southpeak Interactive is also listed, but for an “unknown” amount. Liabilities are said to range from $10 to $50 million.
In March, an unconfirmed number of staff were let go from the Texas-based studio, although Polygon cited anonymous sources who claimed there were “about 25” layoffs and was partly caused by a publishing deal falling through.
TimeGate also faces paying $7.35 million to Southpeak Interactive following a legal clash. TimeGate sued Southpeak in 2009, claiming royalties were withheld and localized versions of Section 8 were not produced which Southpeak allegedly agreed to. Southpeak filed a countersuit alledging that TimeGate did not invest enough of its own capital into the game.
An arbitrator originally ruled in favour of Southpeak, but the decision was overturned by a federal court. The US Court of Appeals’ recently decided to reverse and remand the previous ruling, forcing TimeGate to pay Southpeak $7.35 million in damages and forfeit the Section 8 franchise rights.
(via CVG)