Paradox claims SouthPeak owes it $585,382 from the sale of its games via a distribution agreement, however the money remains unpaid due to SouthPeak's insolvency.
"SouthPeak has failed to comply with its payment obligations even for game units which it previously reported to Paradox, and SouthPeak's executives have informed Paradox's executives that SouthPeak is currently financially unable to satisfy its payment obligations to Paradox under the Agreement," reads the filing uncovered by Gamasutra.
Paradox’s filing claims it terminated the distribution agreement in February to which SouthPeak chairman, Terry Phillips, "threatened" to seek to recall unsold games from retailers
"There is no rational business reason for requesting such returns; it is contrary to the provisions in the Agreement for post-termination handling of product."
Late last year, TimeGate Studios, developer of Section 8, launched a lawsuit against SouthPeak claiming it had been withholding royalty payments.