Employees no longer under the Factor 5 banner have launched a lawsuit against the studio founders for apparently moving assets to avoid paying wages.
They allegedly moved assets ahead of declaring bankruptcy to avoid salary costs. White Harvest and Factor 5 are "essentially the same company", just with a new name and address.
"We allege in the suit that Factor 5 and its three founders fraudulently transferred assets, including source code and other intellectual property to Blue Harvest, which is now known as White Harvest," said James Smith, a lawyer representing the ex-employees.
"We believe and have alleged in the complaint that Factor 5 and White Harvest are essentially the same company, being run by the same people, being represented by the same sets of lawyers, with all the same management and ownership and control, performing all the same work that they were doing at Factor 5, just now with a new name and a new address," he added.
Factor 5 management performed a number of tactics to shield assets from the bankruptcy declaration apparently, including the transfer of source code to Blue Harvest which later became White Harvest.
The suit also reveals that Factor 5 ceased payments to employees on November 1st, 2008 and then "abruptly laid off all employees with little or no notice," on December 19th, 2008, "just before Christmas." The defendants are yet to offer comment on the lawsuit.
One things clear, getting into the videogames industry as a lawyer is a guarantee these days. What's that? You know how to sue the pants off people? You're in my friend.
Ex-Factor 5's accuse founders of "fraudulently transferred assets"
18 June 2009 | By Simon Priest