Developer Silicon Knights has filed a breach of contract lawsuit in North Carolina against Epic Games.
Epic's Mark Rein notified the media of the pending legal action this afternoon but declined to give specifics, saying only that "We believe the claims against us are unfounded and without merit and we intend to fully defend against them."
According to Gamasutra, the lawsuit alleges that Epic failed to provide Silicon Knights, a licensee of Epic's Unreal game engine, with a final development kit in a timely fashion. The lawsuit further alleges that Epic failed to provide Silicon Knights with support, instead concentrating on completing its own games, specifically Gears of War and Unreal Tournament 2007.
Silicon Knights had licensed the Unreal Engine 3 for use in its upcoming Xbox 360 title, Too Human. The game was notably absent from this year's E3.
According to the legal documents, Silicon Knights was forced to write its own game engine last year after the delay.