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40,000 SouthPeak games seized by UK court; legal troubles heating up

SouthPeak faces difficult legal and financial trouble
SouthPeak faces legal and financial trouble
 

The bitter struggle between game publisher SouthPeak (Two Worlds II, TNA iMPACT!) and distribution partner CDV has taken many turns, but today the outlook for SouthPeak begins to look especially grim.

Let's get everyone caught up first. Try to follow along as it's a bit convoluted:

CDV is a German distributor of SouthPeak titles, and claimed last year that SouthPeak had induced copyright infringement and breach of contract. A UK court ruling found in favor of CDV to the tune of $3.4 million. In a move that could be hailed as evil genius, Southpeak responded by purchasing development studio IRP which was owed money by CDV. Then, claiming that CDV now owed them $6 million, SouthPeak filed a countersuit. Not pleased with this move, CDV filed for insolvency (similar to bankruptcy) in April 2010, citing debt caused by the original SouthPeak copyright infringement case.

Alright, flash forward to present day. Due to lack of payment the UK courts have taken decisive action. The consequences to SouthPeak could be devastating.

According to UK media reports, High Court Enforcement Officers (our version of Bailiffs) drove to SouthPeak's warehouse this morning and packed up 40,000 units of software - basically two truckloads - all of which will be sold at auction. We estimate the average retail value of this product at a conservative $1.6 million (Assuming a $40 per title value). When one considers that SouthPeak only made a $192,000 profit in Q3 of this year, you begin to understand the potential financial trouble they're facing.

It's also worth noting that SouthPeak is no stranger to legal trouble. In the past year they've been sued by Paradox Interactive and TimeGate.

As one of our readers noted, SouthPeak also distributes 3D Dot Heroes in Europe, which could make this already rare game now impossible to find.

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