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Perpetually Messing Up
By Cameron Sorden | December 11, 2007
First Perpetual Entertainment had to axe Gods and Heroes, then there was the debacle about making Star Trek Online a “more casual game,” and now, it looks like they could be in major legal trouble due to fraud. From Ten Ton Hammer’s exclusive article:
Details surrounding Perpetual Entertainment’s dealings subsequent to the cancellation of Gods & Heroes are coming to light as Ten Ton Hammer uncovered court documents of a new complaint just submitted to California’s Superior Court last week. The allegation: the San Francisco-based developer fraudulently transferred valuable assets (like the Star Trek Online license) to an insider-owned corporation at a loss, leaving those with a financial stake in the now-defunct MMORPG Gods & Heroes: Rome Rising without hope of payment save legal recourse.
Pop over to the article to read the rest. A lot of people are probably going to have opinions on this one, but for now, Cody Bye’s blog post about it provides an excellent analysis of the situation. Here’s an excerpt:
Before the Internet explodes with speculations, violent outbursts, and dandified language from the industry press, I wanted to take a few moment to weigh in on our report of Kohnke leveraging a lawsuit against Perpetual and the consequences that will be felt for the supposed fraudulent behavior that Perpetual engaged in. These are real allegations pointed at Perpetual, and the maximum payout (somewhere around $280,000) is nothing to sneeze at. It’s a hefty sum of funds for any development studio, but the money isn’t really what’s at stake in this lawsuit.
This whole thing is crazy. As if Perpetual didn’t have enough problems to begin with, right? If the allegations are true, what a dumb move to make on their part.
Don’t expect to see any real progress on STO until they can hash all this out.
Topics: Random |
December 11th, 2007 at 2:31 pm
[...] 11 12 2007 Ten Ton Hammer (and Cameron at Random Battle which is where I saw it) is reporting about the latest saga in the Perpetual saga. In a nutshell, [...]
December 11th, 2007 at 3:13 pm
Looks pretty lame to me. Line up the dates for the documents we know about and compare them to the quotes and the dates they were made.
We know they had the ABC in the works at least in late September. My understanding is that a transfer of assets near a bankruptcy or ABC proceeding wouldn’t necessarily be a fraudulent transfer so long as the company received fair market value for the assets.
The practical effect though is that in a private sale to a company controlled by insiders of the selling company, it immediately raises questions as to the valuation of the assets sold. Doing a deal like that (and saying what they said) is practically asking to be sued even if they had no ill intent and they actually received fair market value for the assets.
Is this franchise cursed?
December 12th, 2007 at 7:01 am
I’m still leaning toward desperation move as opposed to cynical manipulation… not that it’s utterly free of the latter. A brief scanning of the filing didn’t exactly make me feel all warm and fuzzy tho…
December 12th, 2007 at 7:02 am
P.S. Is this franchise cursed?
Um, “yes”.
This has been another edition of “simple answers to simple questions…”