Bad news for the developer behind Section 8 and part of Aliens: Colonial Marines, as TimeGate Studios filed for Chapter 11 bankruptcy protection yesterday. It was filed in the Texas Southern Bankruptcy Court, with TimeGate listing between $10 and $50 million owed to various creditors. Some of the top creditors include the likes of Epic Games, Agora Games, and DJ2 Entertainment, with many more claiming at least some money owed (including $34.80 to a local pizza place).
One of the other top creditors is Southpeak Interactive, which published the original Section 8, although its money owed isn't officially listed. It's likely Southpeak is claiming the biggest chunk of change, especially in light of the fraud suit between it and TimeGate. Back in 2009, TimeGate sued Southpeak saying it was owed royalities and the publisher failed to localize Section 8. Southpeak countersued, claiming TimeGate didn't spend enough of its own money during development.
The case went into arbitration with a third party that awarded Southpeak $7.35 million and ownership of the Section 8 license, but it was overturned in federal court last year. However, the U.S. Court of Appeals for the Fifth Circuit decided to reverse and remand the previous ruling, with the arbitration reward reinstated for Southpeak.
In addition to the bankruptcy protection, TimeGate was hit with layoffs in March, and then earlier today a class action lawsuit was filed against Gearbox and SEGA for Aliens: Colonial Marines. That lawsuit claims false advertising, but it's unknown if TimeGate is going to be included since it co-developed the game.