Perpetual Entertainment In Legal Trouble

Perpetual Entertainment has allegedly pulled some business shenanigans in dealing with the recent cancellation of their MMORPG God & Heroes. The MMO was put on "indefinite hold" back in mid-October and according to court documents obtained by TenTonHammer, Perpetual left investors holding the bill.

The case was drawn up by the company's former PR-firm, Kohnke Communications, who is now seeking between $80,000 and $290,000 and perhaps much more in punitive damages. The PR-firm alleges that the developer essentially skipped out on their losses by selling off its assets, including the Star Trek Online MMO license, below market value to another company called P2. Kohnke claims that P2 is just Perpetual rebooting itself, as P2 is run by many of the same people, and avoiding creditors. The firm cites the fact that just a day after the sale Perpetual disclosed that they would be entering ABC proceedings (California's answer to lengthy bankruptcy proceedings) leaving creditors with no assets to liquidate.

The following is an except from the court documents on the case:
"Star Trek Online Executive Producer Daron Stinnett published comments on November 28, 2007 at startrek-online.net, flatly denying that Perpetual was in the process of liquidating and representing that Perpetual was still an ongoing concern: 'There was also a report about PE liquidating our assets. That report relates to a transaction that took place a while back. And while I can't go into details right now, I want to assure the community that the entire Star Trek team is still here working hard…' "Just one day later, the story changed dramatically. On November 29, 2007, Keene [Joseph Keene, an officer of both Perpetual and P2 with a 'significant equity stake in the company'] confirmed to counsel for Kohnke that Perpetual had executed the ABC, and that all of Perpetual's assets were in the hands of Perpetual ABC. However, Keene also admitted that, prior to executing the ABC, Perpetual transferred certain assets to P2.