Mark Androvich 21:03 (BST)
11/12/2007

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Kohnke Communications, a US PR firm, has filed suit against Perpetual Entertainment, developers of the Gods & Heroes and Star Trek Online MMOs.

The complaint alleges breach of contract, fraudulent transfer, intentional interference with contract, and fraud on the part of Perpetual.

Kohnke, which was hired by Perpetual in early 2007 to conduct a public relations campaign for Gods & Heroes, signed a contract worth USD 15,000 per month. However, for a seven month period, USD 10,000 would be withheld each month under a unique compensation arrangement.

Kohnke would be paid back the USD 70,000 plus an incentive of up to 400 per cent of the withheld monies, or USD 280,000, based upon the number of subscribers 90 days after the game's shipment date.

On October 9, Perpetual announced that Gods & Heroes had been placed on indefinite hold.

Kohkne alleges that it was not paid for all of its work, and was unaware of Perpetual's financial situation until it received a notice of assignment for the benefit of creditors. It further alleges that Perpetual transferred assets for less than market value, intentionally interfering in the contract by causing or worsening Perpetual's insolvency, resulting in the cancellation of the game which would have earned Kohnke money under the incentive plan.

Kohnke is seeking compensatory damages in the range of USD 80,675 to USD 290,675, as well as punitive and/or exemplary damages.

Perpetual has 30 days in which to file a response to the lawsuit. A case management conference has been set for May 2008.

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