Publisher JoWooD has announced that efforts to shore up its capital and equity have failed.
The Austrian firm filed for insolvency last Friday, asking Vienna's commercial court for a procedure of capital reorganisation.
However, the board believes JoWooD will continue, claiming it can conclude successful discussions with investors and creditors "within 90 days."
Simulataneously, JoWooD is pursuing a lawsuit against fellow publisher Koch Media BmbH, claiming the German firm had underpaid for 6.4 million JoWooD shares in 2006.
The shortfall is claimed to be €2.36 million ($3.04 million), plus interest. The underpayment was perhaps not committed knowingly, JoWooD having itself recalculated the worth of accounts receivables offered by Koch in exchange for the shares. Austrian corporate law stipulates that Koch could be liable for the shortfall "irrespective of fault."
JoWooD and Koch have been in court before, but settled their disputes in 2008. Despite this, "With a view to JoWooD's strained financial situation and based on corporate law considerations, the company's management board today decided to file the law suit in the company's and its shareholders' interest."
The company also suggests that "a final court decision will be rendered only after tedious proceedings that could last for several years" - perhaps hoping to lure Koch into an earlier settlement.