The developer behind Sector 8 (and, allegedly, more than its fair share of Aliens: Colonial Marines), TimeGate, has filed for Chapter 11 bankruptcy after losing a legal battle against publisher SouthPeak for control of its IP and over $7 million in damages.
The petition, filed in Texas Southern Bankruptcy Court on Wednesday, notes around 50 creditors to which the studios owes money to. Total liabilities range from $10 million to $50 million. Creditors include Epic Games, Agora Games, a local pizzeria and SouthPeak Games.
TimeGate's legal battle with SouthPeak is both long and rather convoluted, dating back to 2009 and the release of Sector 8
. The developer filed suit against its publisher, claiming that SouthPeak had failed to appropriately localise the game while also withholding royalties. SouthPeak counter-sued, alleging that the studio hadn't invested enough of its own capital into the project's development.
A third party was brought in to mediate the issue, and a decision was made that SouthPeak should control the Sector 8
IP and be owed $7.8m in damages. That was overturned in a federal court last March, and last week that overturning was overturned, slapping TimeGate with a steep bill and a loss of its game property.
The studio was working on multiplayer shooter Minimum
, but has said that its current situation is likely to affect the release of the new game.