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Stargate Worlds Dev Cheyenne Mountain To File For Bankruptcy
by Leigh Alexander [PC, Console/PC]
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February 22, 2010
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Despite some internal conflict, Stargate Worlds developer Cheyenne Mountain Entertainment has decided to declare bankruptcy, as shareholders file a complaint against its former chairman and CEO.
The company has faced challenges obtaining enough funding to finish Stargate Worlds. As a stopgap, it released PC third-person shooter Stargate Resistance, hoping proceeds from the title would help it "ride out the economic wave," as it said late last year.
However, it seems that the studio's challenges have become overwhelming: "Cheyenne Mountain’s corporate structure has undergone some dramatic changes in the last few weeks, and that has resulted in various actions such as the filing for Chapter 11," said the company's subsidiary, developer FireSky, in a statement on the official Stargate Worlds forums.
The statement suggests that perhaps not all of the company's steerage is on board with the bankruptcy decision: "Certain parties believed that was the right thing to do, other parties do not and this is still being evaluated and may be rescinded," says FireSky.
The spokesperson indicated that the bankruptcy, if it proceeds, could simply allow for a debt restructuring and not a shutdown nor hindrance of daily operations. "This will all be sorted out in the legal and proper manner, and all of us on the development side of things hope it’s done as quickly as possible," adds the statement.
At the same time, an announcement on Cheyenne Mountain's official site says that the company's shareholders have filed suit in Arizona against former chairman Gary Whiting, "alleging various wrongdoing against the company." Whiting is also the subject of a Utah lawsuit that alleges he placed Cheyenne into debt to Garvick Properties -- an LLC that Whiting himself owns.
According to Cheyenne's statement, Whiting and Garvick Properties purchased "various securities" from Cheyenne and its subsidiaries without honoring the payment obligations, causing Cheyenne to foreclose on the debt.
Cheyenne was founded in 2005 to develop the Stargate property. In a 2008 Gamasutra interview, strategic operations VP Joe Ybarra said that it had taken Cheyenne's founders three years after securing the Stargate rights to find and select Whiting as the company's "primary fund-raiser."
FireSky's statement concludes that Stargate Resistance remains active and supported, however; despite the bankruptcy and legal proceedings, "our entire staff is in-house working on upgrades and expansions for Stargate Resistance, and we continue to be motivated and excited by the response we’ve received from our customers."
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