Star Trek Online Dev. Perpetual Sued by PR Firm, Charged with Breach of Contract, Fraud (Updated)

By Carlos Bergfeld and Chris Faylor, Dec 11, 2007 1:30pm PST Update 3: Kohnke has clarified the statement that it convinced journalists to "write positive reviews about the game" as a typo, noting that the document should have read "preview" instead.

"Flat out, we don't convince people to write positive reviews," Kohnke VP Sean Kauppinen told Shacknews. "We're not paying anyone off to review games."

Update 2: The full text of the seven-count complaint reveals additional details on Kohnke's suit against Perpetual. Among the claims, the complaint levies charges of fraud against P2, Perpetual, and Perpetual employees Chris McKibbin and Josh Keene.

"The reason that Gods & Heroes was cancelled had nothing to do with the commercial expectations for that game--it was cancelled solely due to the desire of Keene, McKibbin, and P2 to concentrate on Star Trek Online, which they believed was adversely affected by Gods & Heroes," the complaint reads.

Kohnke alleges that Perpetual owes it $10,675 in outstanding invoices, in addition to fees for its work promoting Gods & Heroes. Depending on the game's success after launch, Kohnke would be entitled to a minimum of $70,000 and a maximum of $280,000. The complaint alleges that Kohnke's work on promoting the game should entitle it to the maximum amount.

"Kohnke's public relations campaign was successful in creating pre-release 'buzz' around Gods & Heroes, and in convincing reviewers to write positive reviews about the game," the text reads. "Kohnke is also entitled to punitivie and/or exemplary damages due to P2, Keen and McKibbin's conduct, which was fraudulent, oppressive, and with malice."

The complaint also alleges that Perpetual's transfer of assets to P2 was performed with the specific intention of avoiding payment on Kohnke's work related to promoting Gods & Heroes. "Perpetual knew that, by transferring assets to P2, it would lack the assets to pay its debt or other claims owed to Kohnke," the text reads.

Update: Shacknews has acquired the whole of Kohkne Communication's 13-page complaint, detailing all of the firm's grievances with Perpetual Entertainment.

Original Story: Public relations firm Kohnke Communications has filed charges against Star Trek Online developer Perpetual Entertainment, alleging the company of breach of contract, fraud, intentional interference with contract, and other similar charges.

The charges, which were unearthed by TenTonHammer, stem from Perpetual's recent shift in ownership, in which most of its assets were transferred to another company and its Gods & Heroes: Rome Rising project was placed on indefinite hold.

That move, which was speculated to be "reset" of its investors, left some of those investors high and dry. Korean MMO publisher Gravity Co., LTD. recently announced that its $9 million investment in the company is presumed lost.

Kohnke claims that the timing of the asset transfer and the lack of disclosure to investors regarding it, especially in the face of constant rumors, was deceitful.

"Perpetual received less than market value for the assets it transferred to P2, and the transfer made Perpetual insolvent (or worsened Perpetual's existing insolvency)," reads the court document.

The PR firms further claims that Perpetual asked the company to create marketing material for Gods & Heroes on October 9, despite having reached the decision to cancel the title on September 27.

It also alleges that one of the reasons behind the cancellation of Gods & Heroes was to avoid paying out the bonuses due to Kohnke upon its release, which would have financially weakened the company further.

According to court documents, Kohnke is seeking a bare minimum of $80,000 to $290,000 in damages

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