According to this Kotaku report citing two unnamed sources with knowledge of the situation, TimeGate Studios has laid off its entire staff. The developer behind Section 8 and the co-developer of Aliens: Colonial Marines sent everyone home early today according to the sources. This news is not altogether unexpected given that the studios filed for bankruptcy last week as it faced a multi-million dollar judgment from publisher SouthPeak Interactive over its handling of the Section 8 franchise.
One source speaking to Kotaku said that the win on appeal of a previous SouthPeak arbitration victory in the Section 8 lawsuit spelled the end of the company.
A few weeks ago a court sided with SouthPeak Interactive, publisher of the original Section 8, which said that it was owed an "unknown" amount related to that game publishing deal. TimeGate tried to appeal a decision that came out of arbitration related to the 2009 lawsuit. That arbitration led to a $7.35 million judgment against the developer and a loss of the Section 8 license. In April, the Court of Appeals reversed a lower court decision that sided with TimeGate related to the Section 8 franchise and the arbitration ruling.
We will have more on this story as it develops. TimeGate is not publicly commenting on this story.