Factor 5 being sued by ex-employees for fraud

Posted Jun 17, 2009 at 5:43AM EST by Karl B.

Listed in: Wii, PS3, Xbox 360 Tags: Factor 5, Jedi, LucasArts, Rogue, Star Wars

Factor 5 - Image 1

It seems Factor 5's financial problems has led to even more trouble after the developer shut down last month. Former Factor 5 employees are now suing the Lair developer for fraudulent behavior in order to get out of paying their debts, Gamasutra reports.

Estimates have put the company's debts between US$ 1 million to US$ 10 million. Shortly after it folded, 69 employees reportedly claimed for unpaid wages totaling over US$ 900,000.

"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, the plaintiffs' lawyer.

Since Factor 5 has been heavily involved with LucasArts' Star Wars Rogue Squadron games, it's interesting to note that "Blue Harvest" was the fake working title for Star Wars Episode VI: Return of the Jedi. Just a little factoid.

Smith went on to say that they believe 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."

Factor 5 head Julian Eggebrecht was also singled out, with Smith accusing him of trying to keep his own assets safe by transferring his share of a house to the woman with whom he shared the title for a fraction of the house's value.

Neither Eggebrecht or anybody from Factor 5 / White Harvest have responded yet.

Factor 5 throws in the towel -- officially

Via Gamasutra

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I think it's pretty clear that the former employees are saying that the head managers of Factor 5 hid assets in a shell corporation (to avoid losing them in Bankruptcy), and then went about business-as-usual in a new company (while meanwhile stiffing-it to the people who were let go and told, "Sorry, suckers: no cash left!")

# Thats — GUNBEHINDTHESUN 2009-06-17 23:45

Horrible

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Factor 5 being sued by ex-employees for fraud

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