In an earlier report we stated that Linux gaming specialist Loki Software had filed for bankruptcy, but this was not entirely true. The ailing company, which has carved a niche for itself porting other people's games to Linux, has instead filed for bankruptcy protection under Chapter 11 in an attempt to stave off collapse as a result of an alleged $1.5m debt mountain. Things came to a head when a former employee called Mark Lance Colvin won $237,000 from Loki in court after complaining that he was owed salary for most of the 19 months he had worked there, as well as a large amount of money he had loaned the company himself during its financial troubles.
Other employees and publishers the company owes significant amounts of money to are now clamouring to be paid, and the Chapter 11 filing was made in a last ditch attempt to prevent them from liquidating Loki to get the money back. Loki founder Scott Draeker claims that although "we made some mistakes [and] ran up some bills that we couldn't pay", his company is actually now profitable. Whether that will be enough to save Loki remains to be seen, but Scott told Linux Today that "we will be proposing a plan and we intend it to be fair and equitable to the creditors and realistic, so the company can go ahead".
The real question is whether or not the company has a future to go ahead to. Speaking in a thread on Slashdot, id Software co-founder and engine programmer John Carmack revealed that "we are one of the creditors that aren't likely to see money that Loki owes us, so we have some idea just how grim it is". According to Carmack, "all Linux game sales ever don't add up to one medium selling Windows title", and although id has always supported Linux this is more down to ideological than practical reasons. "That isn't saying that .. doing Linux ports isn't a Good Thing, but it isn't an economic motivator at the present time".
Meanwhile Colvin's lawyer David J. Harter confirmed that they have yet to see any money from the case because of the bankruptcy protection filing. "They will very likely end up paying only a small portion of their debts, while my guy will be paying off credit card debts incurred in behalf of Loki for the next 20 years".
Whether or not Loki survives, it seems certain that there will be no real winners from this unfortunate situation.