SouthPeak’s Legal Troubles Heating Up

The epic battle between game publisher SouthPeak and distribution partner CDV has taken a number of turns in the past, but today the outlook for SouthPeak begins to look especially grim.

Here’s some history between the two to bring you all up to date.

CDV is a German distributor of SouthPeak titles, which claimed last year that SouthPeak had induced copyright infringement and breach of contract. A UK court ruling found in favour of CDV to the princely sum of of $3.4 million. Southpeak soon 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. Outraged with this move, CDV filed for insolvency (similar to bankruptcy) in April 2010, citing debt caused by the original SouthPeak copyright infringement case.

And now back 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 drove all the way to SouthPeak’s warehouse this morning and packed up 40,000 units of software to pretty much be sold at auction. We estimated the average retail value of this product to come up to $1.6 million. 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 true that SouthPeak is no stranger to legal trouble. In the past year they’ve been sued by Paradox Interactive and TimeGate.