Embattled publisher Interplay has had its headquarters in California shut down by state authorities, after it emerged that the company failed to pay employees last month, and has no workers' compensation insurance.
Investigators from the Labour Standards Enforcement division of California's Department of Industrial Relations made an inspection of the Interplay offices on Friday after being informed that staff had not been paid, and forced operations at the offices to be suspended.
"An employer has responsibilities when they open a business," a spokesperson for the California Labour Commisssioner told the Orange County Register, which broke the story. "The responsibilities include proper and timely payment of wages. It includes providing workers compensation coverage in case there are injuries. If the employer cannot accommodate those basic issues of doing business, we cannot allow employees to work."
Although this does not amount to Interplay being shut down - something which the Labour Commissioner does not have the power to do, as we understand the situation - it does effectively mean that the operations of the company have been entirely halted pending either a resolution which allows employees to return to work, or the complete closure of the operation.
Interplay CEO Herve Caen maintained his bullish tone over the future of the company, commenting that "I hope to have [insurance] back by Monday or Tuesday," but this latest difficulty is only one of the huge problems faced by the publisher.
It also faces eviction from its offices by landlord Arden Realty, to whom it owes some $432,000 in unpaid rent, and employees have been warned by Arden that they should remove their personal belongings pending a lockout.
That debt is in addition to $179,000 owed to the state in unpaid taxes, $79,000 which it is being fined for the labour law infractions which have led to this suspension of business, and a potential debt of $156,000 in royalties for Baldur's Gate for which it is being sued by Canadian developer Bioware.
That's enough to consume the lion's share of the $1.2 million in cash assets which the company had in its financial statement in mid-April - and it's unlikely that it even has that much cash at the moment, having shed some 40 staff in the interim weeks.
Interplay's shares are currently trading at under 5 cents - the lowest they've ever been, and down from a price of 16.5 cents around this time last year.