Former Factor 5 Employees Sue for Fraud
by Mike Bendel on June 17, 2009 @ 12:34 pm

According to a Gamasutra report, five former employees of the recently shuttered San Rafel-based Factor 5 are suing the company on allegations of fraud.
The suit alleges that copyrighted assets, including associated source code for a supposed Wii version of Star Wars: Rogue Squadron, were funneled to a temporary company named Blue Harvest, now White Harvest, to stay under the radar and avoid repossession by creditors.
Lawyer James Smith, who represents the five ex-employees, weighs in on the situation:
We believe and have alleged in the complaint that 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.
With an estimated $1 million to $10 million in debt, Factor 5 closed its doors last May, leading to the termination of 37 jobs. None of the company founders named in this suit have spoken publicly yet, so we’ll have to wait and see how this one turns out. Things aren’t looking up, as the plaintiffs seem to have a solid case.
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Read more: Factor 5 U.S. Branch Officially Closes, Tecmo In Trouble, Employees Sue, Itagaki Files Suit Against Tecmo, Announces Resignation, Activision Counter Sues Ex-Infinity Ward Co-Founders, Factor 5 To Develop Wii Title






