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Bailiffs Seize SouthPeak Game Product From UK Warehouse
by Leigh Alexander [PC, Console/PC]
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July 20, 2010
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Troubled publisher SouthPeak, which has been engaged in ongoing legal disputes with its publishing and distribution partners, now faces a new wrinkle, as media reports say court bailiffs have seized some 40,000 units of software from the company's warehouse.
UK website GamesIndustry.biz says that amid a conflict with European distributor CDV, which alleges SouthPeak still owes it $3.4 million, High Court Enforcement Officers have seized the warehouse stock to be sold at auction. CDV filed for preliminary insolvency in April of this year.
As its debts to CDV accrued, SouthPeak appears to have countered by acquiring a little-known company that holds a debt claim against CDV. According to the report, CDV's UK offices had to close last month.
"It's not settled, it never was settled," CDV UK's attorney, Fladgate LLP 's Lawrence Abramson, told GamesIndustry.biz. "There were discussions about a settlement but they never concluded them and most importantly they've only paid $100,000. That's exactly what they have paid."
SouthPeak is also currently facing a lawsuit from Section 8 developer TimeGate Studios, which alleges withheld royalties and breach of contract. TimeGate filed suit at the end of 2009, and is seeking unspecified "compensatory damages". SouthPeak says its acquisition of original Section 8 publisher Gamecock exempts it from some specifics of the original agreement.
It also resolved a distribution dispute with PC developer Paradox Interactive, under the terms of which SouthPeak agreed to pay the company what it owed -- $585,382 in unpaid revenues from the distribution of its games -- and agreed not to pursue action to reclaim unsold Paradox games from retailers.
Less than a week ago SouthPeak secured a $10 million line of asset-based credit through February 28, 2012 from financial services firm Rosenthal & Rosenthal. The new line of credit can increase up to an additional $3 million if SouthPeak's stockholders' equity increases. It replaces SouthPeak's previous $8 million revolving credit line from SunTrust Banks, which the company said it repaid with "personal securities and assets by two company shareholders".
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