Fraud complaint filed over ‘Stargate’ video games

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Stargate ResistanceShareholders in a Mesa video game developer say the company spent “tens of millions of dollars” to develop games based on MGM’s Stargate franchise before filing for bankruptcy, then transferred its assets to a new company without the approval of a bankruptcy judge.

Dark Comet Games, Fresh Start Studios and five individuals are named as defendants, according to Courthouse News Service. The companies were formed in the wake of Cheyenne Mountain Entertainment’s collapse to maintain the just-published third-person shooter Stargate Resistance, which was rushed to market in lieu of the long-delayed online roleplaying game Stargate Worlds.

The complaint says Fresh Start tried to remove all of Cheyenne Mountain’s assets from its offices on Feb. 24, almost two weeks after it sought bankruptcy protection — but was prevented from doing so by police.

Shareholders say Fresh Start paid only $100,000 for all of Cheyenne Mountain’s assets — a fraction of 1 percent of their alleged worth. The plaintiffs, alleging breach of contract, civil conspiracy, fraudulent transfer, “tortious interference” and unjust enrichment, want the transfer declared fraudulent and all assets returned, plus $10 million in damages. They say Fresh Start knew that “there was a substantial risk that the validity of that agreement would be subject to a legal challenge because of CME’s bankruptcy, the lack of approval by the appropriate shareholders, the lack of approval by the boards of CME or CMG, the lack of any authorizing resolution, and the lack of any signature by the president of CME or CMG.”

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Jayson Peters
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