Thu, Apr 15, 2010 | 15:47 BST
cdv Software files for preliminary insolvency
cdv Software Entertainment AG has filed for preliminary insolvency, due to non-payment of a settlement court-ordered to be given to it by SouthPeak.
What this means, is that the company is either unable to pay its debts when they fall due or its assets do not cover its liabilities and is unable to pay its debts.
When this happens, a court-ordered administrator is appointed to be a liaison between the debtor and those it owes.
Affiliated companies cdv Deutschland, cdv Software Entertainment USA and cdv Software Entertainment Ltd are currently not affected by the insolvency filing.
The court in Frankfurt, Germany, has appointed an Preliminary Administrator Dr. Robert Schiebe to examine the situation and opportunities, in order to allow cdv to continue trading. cdv remains fully operational and along with Schiebe, the management team is working on solutions to restructure the company and continue discussions with investors and potential purchasers.
Legal actions against SouthPeak are also being continued, as SouthPeak’s claim that payments arising from the rulings against it and owed to cdv can be offset against a loan which it obtained from a Third Party. As a result, cdv’s lawyers have rejected this claim.
This isn’t the first time SouthPeak has been accused of not ponying up what is owed, as last August, former employees of Gamecock (which SouthPeak purchased) took the company to court over unpaid wages.