Blue Omega Entertainment has laid of its games development team.
"The entire Blue Omega team was laid off today (well, starting Friday). If anyone has job openings, send them my way and I'll pass them on," wrote programmer Geoff Rowland on his Twitter account.
Blue Omega Entertainment, a subsidiary of Heavy Hammer, was established to develop intellectual properties for use in both games and films.
It won second place for its Damnation prototype in the Nvidia Make Something Unreal Contest in 2004, and the fully-realised game was released by Codemasters this year although it was mauled by reviewers with Metacritic ratings of below 40 per cent.
Legal documents published on Shacknews show a messy legal situation between publisher Codemasters, Blue Omega and two sub-contractors Velvetelvis Studios and Point of View.
According to the report, Codemasters had removed the Blue Omega from development duties, while Point of View continued work on the project, prompting a USD 75,000 lawsuit from Blue Omega.
Blue Omega also claims delays by Velvetelvis caused the developer to miss deadlines with Codemasters, and again seeks USD 75,000 in damages.