German publisher CDV Software Entertainment AG filed for preliminary insolvency on April 12, but the company said Thursday that it "plan[s] to keep the business running" and that the company's Frankfurt headquarters are "fully operational."
CDV said that it filed for insolvency after former distribution partner SouthPeak failed to pay a court-ordered settlement to CDV. CDV has won two rulings in legal battles against SouthPeak involving breach of contract and copyright infringement claims.
SouthPeak recently acquired a little-known company
that holds a €4.4 million ($6 million) repayment claim against CDV, meaning CDV now owes that amount to SouthPeak. SouthPeak said the amount offsets the court ordered settlement amount owed to CDV, but CDV said its lawyers reject this claim.
The preliminary insolvency only applies to CDV Software Entertainment AG in Germany. Subsidiaries including CDV Deutschland GmbH, SDV Software Entertainment USA and CDV Software Entertainment Ltd. "are not currently affected," CDV said.
Following the insolvency filing, a Frankfurt court assigned to CDV an administrator to help navigate the publisher through its current financial situation.
"The Administrator together with the management team is now proactively working on solutions to restructure the company and discussions with investors and potential purchasers are on-going," CDV said in a statement.