Jakks Pacific has gone ahead and notified World Wrestling Entertainment of their intentions to renew to license to create video games based on the highly popular wrestling franchise for another five years, extending the current agreement until December 31st, 2014. Seems like a good idea, right?

Well not according to THQ, Jakks' partner in the Joint Venture that holds said license. According to a statement issued by Jakks Pacific today, THQ has filed a lawsuit in California Superior Court, asking that the court declare that Jakks was not authorized to make such a decision and THQ is not obligated to consent to such a decision.

Even more telling, THQ is also asking that the court declare a restrictive covenant in the Joint Venture agreement that restricts THQ from publishing a wrestling title for a period of one year following the termination of said venture be deemed unenforceable in California.

So basically THQ is looking to cover their assets, making sure that if they terminate the Jakks agreement that they'll still be able to publish wrestling titles. Jakks and THQ have also initiated arbitration proceedings relating to the issues, so the court case might come to nothing. Either way, it should be an interesting match.

When Factor 5 filed for Chapter 7 bankruptcy on May 13th of this year, they had an estimated $50,000 to $100,000 in assets, with debt estimated at between $1 and $10 million, with 69 claims for unpaid wages in excess of $900,000. The lawsuit alleges that, prior to the filing, Factor 5 and its three founders transferred company assets to a limited liability company called Blue Harvest, now White Harvest, including original intellectual property and the partially completed code for a Wii installment of the Star Wars: Rogue Squadron series. As the employees' lawyer James Smith explains:

"We believe and have alleged in the complaint that Factor 5 and White Harvest are essentially the same company, being run by the same people, being represented by the same sets of lawyers, with all the same management and ownership and control, performing all the same work that they were doing at Factor 5, just now with a new name and a new address"

The employees are understandably upset. According to the filing, employees at the studio weren't paid after November 1st of last year, after which they were laid off with little notice on December 19th, right before Christmas.

If the allegations are true, this would mean that Factor 5 took assets that could have been negotiated in order to pay their workers and passed them over to another company to save them from sinking along with the rest of the ship.

With the defendants' lawyer declining to comment on the situation, we're currently only seeing one side of the story of course, but quiet lawyers aren't generally a good sign. We look forward to seeing how this whole thing plays out in court, should it make it there.

Employees sue bankrupt San Rafael video-game company [Marin Independent Journal via Edge]

The lawsuit was filed by Prickett, Jones & Elliott on behalf of Take-Two shareholder Patrick Solomon on Friday, March 7th of 2008, naming both Take-Two Executive Chairman Strauss Zelnick and Chief Executive Benjamin Feder. Solomon objected to the company's unwillingness to consider EA's $26 per share offer, which at the time (and currently) was much more than the company's shares were trading for.

The settlement agreement grants additional disclosure to Solomon, but does not include any monetary damages. Take-Two plans to oppose any request for fees and legal expenses, which its insurance will cover if they are indeed awarded.

So let's hear it for a big old waste of time and money!

Take-Two in pact to settle shareholder suit over Electronic Arts deal [MarketWatch via Gamasutra]