TimeGate, the studio behind Section 8 and partially involved in the development of Aliens: Colonial Marines, has reportedly laid off almost all of its staff.
The company recently lost an appeal that left it on the hook for around $8 million in damages and subsequently filed for chapter 11 bankruptcy protection against multiple creditors including a pizzeria owed less than $40.
Now reports from multiple sources claim the studio has laid off its staff.
Kotaku cited two sources who said the entire staff had been laid off, one of whom said everyone had been sent home early.
Rock Paper Shotgun confirmed through its own contacts that the developer had shut down operations.
“Yes, TimeGate is indeed shut down today,” the source said.
“Many longtime employees were let go. I don’t know the details of the lawsuit, but I know that the most recent ruling effectively killed off the studio.”
This further action by the company may come as a result of its chief creditor, Southpeak, which the Wall Street Journal reports has sought to block its chapter 11 proceedings.
The publisher claims TimeGate is using its bankruptcy filing to protect upper-level employees from the ramifications of the recent fraud judgment.
RPS later updated its report, citing a source that said TimeGate's multiplayer FPS Minimum has been put on ice.
“It’s done for now and probably forever," said the source.
"My assumption is that TimeGate will be forced to sell the IP and assets (code, art, etc) in order to help pay off their creditors."
The unnamed source drew comparisons to the collapse of Kingdoms of Amalur developer 38 Studios, which was drawn and quartered by its chief creditor Rhode Island.
"It wouldn’t surprise me to see a situation similar to 38 Studios where an entity with no interest in game development ends up with it, the way the state of Rhode Island now owns the Amalur MMO," continued the source.
"Maybe that pizza place TimeGate stiffed for 40 bucks will take it.”