German console and PC publisher CDV Software Entertainment AG has filed for insolvency at the district court in Frankfurt, reports Gamesindustry.biz.
CDV’s insolvency comes soon after its victory over Southpeak in a long-running UK legal battle by CDV against Southpeak and its subsidiaries over alleged breaches of contract and copyright infringement, which saw Southpeak being ordered to pay substantial damages to CDV.
As Gamesindustry reports, Southpeak has had its own share of financial troubles recently, with publisher Paradox suing it for around $585k which it claimed Southpeak was unable to pay as it had become insolvent. In the event, Southpeak settled with Paradox a month or so after. (A standard strategy when a company owes you money but is in poor financial condition is that you sue them for repayment in the hope that they will settle quickly with you, meaning they keep the business running a while longer and you get more money from the settlement than you would do if the company went into insolvency. This strategy faces legal issues,but it can work – as it did for Paradox).
No doubt further information will emerge as more details of CDV’s entry into insolvency, in particular the court paperwork, emerge. In particular, how long before someone makes an offer to buy up its assets?