Aliens: Colonial Marines co-developer TimeGate Studios has filed a petition for a chapter 11 bankruptcy in Texas.
According to a report by Polygon, TimeGate's total liabilities ranged from somewhere between $10 - $50 million and its top creditors include: Epic Games, online game service Agora Games, and DJ2 Entertainment. Also listed among its creditors are Section 8 publisher Southpeak Interactive, who is owed an undisclosed sum, and a pizza joint that the studio owes a whopping $34.80.
TimeGate Studios could face up to $7.35 million in damages and lose the Section 8 license due to a fraud suit with SouthPeak. Evidently, TimeGate sued Southpeak back in 2009 for withholding royalties and failing to localise Section 8. Southpeak then claimed that TimeGate hadn't invested enough money into the project. The two entered arbitration with a third party where it ruled in favour of Southpeak before this decision was overturned last March in a federal court.
Last month a U.S. Court of Appeals reversed this decision and ruled on the side of Southpeak, leaving TimeGate to owe $7.35 million and forfeit the Section 8 license.