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Cheyenne Sells Stargate Resistance As Debt Mounts

Bankrupt Cheyenne Mountain Entertainment has sold its Stargate Resistance operations to a studio backed by investors struggling to keep the project afloat, as its debt rockets into the millions.

Leigh Alexander

March 29, 2010

2 Min Read

Cheyenne Mountain Entertainment has sold Stargate Resistance, its assets and upkeep to a new studio, Fresh Start, as it struggles to keep the PC shooter afloat in the face of its apparently insurmountable bankruptcy. The company says Fresh Start Studio, which has now assumed support and operating costs for Stargate Resistance, was itself established by "concerned shareholders" of Cheyenne Mountain who "have taken this step in an effort to preserve the game and prevent it from going offline because they felt there was no other alternative." Fresh Start paid Cheyenne Mountain $100,000 for the game, and put $200,000 towards its development, the company said. The studio filed for Chapter 11 in February of this year, and in a memo to shareholders, confirmed it has ceased all game development, laid off its employees, and is vacating its offices completely, as it owes some $35,000 in back rent. According to the memo, the company has only $10,000 in its bank accounts, and it "may" owe at least $2 million to creditors, if not more, while it owes $1.1 million in unpaid wages to its employees since March 2009. Finally, it owes $3 million in Federal and State payroll taxes. The company says it's also the subject of five legal complaints that leave it liable for a potential $10.1 million in total. Cheyenne Mountain has applied for a tax credit from the state of Arizona for 2009, and says it may get $3 million in funds to help cover its taxes should it be approved. A court-appointed receiver is now in charge of the company's assets and affairs. The company declined to comment on an ongoing shareholder lawsuit against former chairman Gary Whiting, "alleging various wrongdoing against the company." Whiting is also the subject of a Utah lawsuit that alleges he placed Cheyenne into debt to Garvick Properties -- an LLC that Whiting himself owns. In today's memo, Cheyenne said a new CEO, Dan Grabois, had reached out to shareholders recently claiming to have been appointed by Whiting, but given that the entire company is now under the control of the court-appointed receiver, claims of executive leadership from anyone are invalid. Cheyenne was founded in 2005 to develop games based on the Stargate property. In a 2008 Gamasutra interview, strategic operations VP Joe Ybarra said that it had taken Cheyenne's founders three years after securing the Stargate rights to find and select Whiting as the company's "primary fund-raiser." The company's main project has always been the perpetually in-development Stargate Worlds MMO, but as the company began to stumble into financial trouble, it began developing Stargate Resistance as a stop-gap for its funding problems.

About the Author(s)

Leigh Alexander


Leigh Alexander is Editor At Large for Gamasutra and the site's former News Director. Her work has appeared in the Los Angeles Times, Variety, Slate, Paste, Kill Screen, GamePro and numerous other publications. She also blogs regularly about gaming and internet culture at her Sexy Videogameland site. [NOTE: Edited 10/02/2014, this feature-linked bio was outdated.]

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