Stargate studio files for C11 bankruptcy

Stargate studio files for C11 bankruptcy

By Rob Crossley

February 22nd 2010 at 11:31AM

CEO shown the door after serious accusations of wrongdoing

The future of Cheyenne Mountain Entertainment was thrown into doubt over the weekend after it was discovered the studio has filed for Chapter 11 bankruptcy.

The Stargate Worlds developer said in an official statement that its corporate structure “has undergone some dramatic changes in the last few weeks”, adding that there was internal disagreements over whether filing for bankruptcy protection was the appropriate action to take.

“Even if the bankruptcy should go through, however, Chapter 11 simply allows a company to restructure its debt to a manageable plan approved by the courts,” read the statement.

Meanwhile, the group made ambiguous yet serious allegations about its former CEO, who left the company very recently.

Cheyenne Mountain Entertainment alleged that Mr Whiting had "various wrong doing against the company", implying that Whiting had transferred money into a separate company he controls.

"The shareholders and board of the Company have removed Mr. Whiting as a board member and as an officer and terminated his employment with the company and any of its subsidiaries. The Company has joined the litigation against Mr. Whiting for alleged wrongdoing."

The legal matter remains without verdict.

“It does not absolve a company of debt, and it does not shut it down or otherwise affect its daily operations.

The group insistyed it wanted the matters to be resolved as quickly as possible. The studio – based in Phoenix, Arizona – said its staff were working on upgrades and expansions for its key title Stargate Resistance.

“We continue to be motivated and excited by the response we’ve received from our customers,” the group added.