Public relations firm Kohnke Communications has sued Perpetual Entertainment, alleging breach of contract, fraud and other charges.
According to a report by GamesIndustry.biz, the PR company was hired in early 2007 to conduct a campaign on behalf of the Gods & Heroes MMOG, at a cost of $15,000 per month. However, according to the terms of the deal, $10,000 would be withheld each month over a seven month stretch, to then be paid back to Kohnke along with an incentive of up to 400 percent of the withheld total, representing $280,000. The percentage was to be based on the number of Gods & Heroes subscribers 90 days after the game shipped.
In October, however, following significant layoffs from the Gods & Heroes development team the previous month, Perpetual announced the game had been placed on indefinite hold, essentially canceling it. Kohnke now claims it has not been paid for its work, and that it was not aware of Perpetual’s difficulties until it received a notice of assignment for the benefit of creditors. As a result of Perpetual’s actions, which it alleges caused or worsened the company’s insolvency and resulted in the cancellation of Gods & Heroes and the loss of incentive plan income for Kohnke, the PR firm is suing for breach of contract, fraudulent transfer, intentional interference with contract and fraud. The suit seeks compensation of $80,675 to $290,675, as well as punitive and-or exemplary damages. Perpetual has 30 days to file a response.
Despite its financial difficulties, which culminated in the liquidation of its assets, Perpetual was reported in late November to have been acquired by new ownership, and that while Gods & Heroes had been canceled, its other project, Star Trek Online, was still in production. The game was expected to take a new direction, aiming for a more casual audience and possibly foregoing monthly fees in favor of microtransactions for optional in-game items.
