SouthPeak apparently cannot escape its legal and financial woes. Bailiffs have seized 40,000 units of SouthPeak stock, as the company still owes payments to publishing partners. Despite what was said in its third quarter 2010 fiscal report in May, legal issues with CDV were not resolved amicably. Third-party debt orders are being enacted in order to redirect payments intended for SouthPeak towards its creditors instead.
"It's not settled, it never was settled," said Lawrence Abramson, partner at Fladgate LLP, the firm representing CDV. "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."
The lack of payment by SouthPeak was the primary driver for CDV’s liquidation earlier in the year, with U.K. offices finally closing in June.
"We have sent High Court Enforcement Officers in last Friday and they took 40,000 units - two trucks worth of stock - out of the warehouse that SouthPeak uses. They had until yesterday to apply to court to stop that being sold at auction and as far as I'm aware they didn't make an application," explained Abramson. "We've also frozen the money from their distributor Centresoft.”
Pending a hearing on August 11, payments from Centresoft will continue to be funneled away from SouthPeak until CDV is paid in full. SouthPeak will have a chance at the hearing to make arguments against that course of action.
"If we haven't been paid in full, then we will carry on doing it again and again. We'll go after more stock and more receivables," said Abramson, warning that a freeze of SouthPeak bank accounts is possible, but currently counter-productive.
"It's no secret that CDV is currently in dispute with SouthPeak Games along with many other companies, whilst CDV is itself in administration," said SouthPeak MD Jonathan Hales. "SouthPeak Games is continuing business as normal and will endeavour to defend itself vehemently and is certain that the proceedings will come to a positive conclusion through the appropriate channels in the near future."
SouthPeak has had a bumpy road, having lost the My Baby franchise to Majesco. The company posted a net income of $192,000 for the third fiscal quarter of 2010, up from a net loss of $692,000 in the same period last year. The company is pinning its hopes on the recent publishing agreement for Firefly Studios’ Stronghold 3.
[Thanks GI.biz]
