SouthPeak Interactive is being sued by Section 8 developer TimeGate, who alleges that the publisher withheld royalty payments and signed a PS3 licensing deal with Russian company IC, which TimeGate says SouthPeak had no right.
In legal documents (obtained by Joystiq), TimeGate also alleges that a SouthPeak T-shirt promotion was unauthorized, the publisher had mislead TimeGate about sales figures and the publisher has stated it should not have to adhere to TimeGate's original agreement, as it had been made with Gamecock, which SouthPeak purchased in late 2008.
"[SouthPeak] failed to provide a sufficient sales report, withheld royalty payments and did not adhere to the obligation to act in good faith and fair dealing when they established the sham transaction in order to deprive TimeGate of royalties despite the special relationship between the parties and being in a position of trust."
SouthPeak has yet to reply to the allegations.