Report: TimeGate lays off remaining staff

Section 8 developer TimeGate laid off its staff today, according to sources who spoke with Kotaku. The studio, which also co-developed Aliens: Colonial Marines with Gearbox Interactive, applied for Chapter 11 bankruptcy protection last week.

Liabilities declared for the bankruptcy proceedings stretched from $10 to $50 million, not including a multi-million dollar fraud judgment against the studio on behalf of Section 8 publisher SouthPeak Interactive. SouthPeak claimed the bankruptcy was a ruse to protect the external assets of TimeGate's majority owners, the Wall Street Journal reports, and asked a bankruptcy judge to convert the proceedings into a Chapter 7 liquidation.

One of Kotaku's sources claims SouthPeak's move was successful in arbitration, and that was the end of TimeGate.