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Factor 5 accused of fraud in new lawsuit

A new lawsuit by former employees of Factor 5 claims the company fraudulently shifted assets to avoid paying up $900,000 in unpaid wages to employees and millions to creditors. The Marin Independent Journal reports the suit outright states that the company stopped paying workers on November 1, 2008 and let them go on December 19. Which explains the many rumors of the company closing shop, six months before the official closure announcement was made in May.

As for the alleged claim of fraud, the suit claims that Factor 5 moved assets such as source code and other IP, into a company, now called White Harvest, to shield it from creditors. The plaintiffs claim that the company is being run by the same people, same lawyers, “with all the same management and ownership and control.” White Harvest is reportedly performing the same work that Factor 5 was up to, just with a brand new name and address of course.  Comment below and tell us what you think of the claims!


[Via Gamasutra]

[Via Joystiq]

5 Comments »

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