WA Dev Interzone Games Close To Liquidation

We received a desperate plea last night from a former staffer at WA developer Interzone Games. Seems the developer is just days from liquidation, with a major outstanding tax debt and unpaid wages to current and former staff. What's even worse is the US parent company could be breaking a wealth of laws to leave local staff high and dry. UPDATE: Interzone CEO Marty Brickey has responded.

UPDATE: Interzone CEO Marty Brickey has responded to the statements made below. Read his perspectives on the collapse of Interzone Games here.

Right now Interzone owes $1 million to the ATO, and another $500,000 to past and present staff, including unpaid super. The company seems to be breaking a number of corporate rules, like having no resident director in Australia since August, nor paying super for two years. And now as the company is set to be liquidated by the ATO, the US parents are trying to pack up server hardware and game code to date to whisk them all away overseas to keep their current game development going while abandoning the local operations. They're even setting up a new development house in Ireland, Big Collision, to follow through on a European distribution deal for the MMO sports game — Interzone Futebol — which sounds quite cool and is supposedly aiming to launch around the timing of this year's World Cup.

So that's $1.5m owed to local staff. Taking assets out of country when liquidation is imminent. Handing assets to another off-shore company while hanging local company out to dry.

It sounds like a pretty massive disaster and a seriously dodgy incident, and it's going down this week. If you happen to work for someone with the authority to bust these guys in the act of ripping IP out of an Australian company and taking it away without appropriate authority to do so, let us know and we'll get you in touch with these guys.

We think it's best to let Tim Colwill, former World Designer for Interzone Games, tell the story in more detail.

We are also following up on this in earnest to see what is being done in the industry to help Interzone Games wrap up in as fair and legal a manner as possible.

——-

There are two legal entities in this saga: the Perth Studio in Western Australia, and the Interzone US corporate arm (Interzone Entertainment), incorporated in Missouri, USA.

Three key players have been spearheading all the actions of the US corporate arm, and consistently failing to meet all promises of compensation and entitlements to the Interzone employees across the globe. These people are Mike Turner, Greg Chadwell, and the Interzone CEO Marty Brickey.

Here's a short history of how Interzone got to this point.

  • The financial troubles of Interzone as a global company began during the infamous credit crunch in late 2008. The US corporate arm continually missed payments to all the international studios (Perth, China, and Brazil) and staff fell weeks behind on pay.
  • The Perth studio, as the lead development studio, was deemed the most important studio to keep alive on the limited funds available, and so the China and Brazil studios received less and less money until eventually their creditors forced them into liquidation, putting around 50 people out of work. These people are still owed substantial amounts of unpaid entitlements, and Mike, Greg and Marty have refused to communicate with them.
  • Despite this drastic action, the US corporate arm could still not find the funds to pay the Perth studio consistently. Much unpaid work was requested of the Perth studio in order to demonstrate the game to potential publishers and continue development. Many key staff left to pursue other (paying) work. From what was once a studio of over 40 full time employees, only 15 remain.
  • Thanks largely to the months of unpaid work by dedicated Perth Studio employees, Interzone managed to finally signed a deal in late August 2009 with a European publisher to deliver the Interzone Futebol game.
  • Interzone are critically behind on the deliverables for this publishing deal, which is perhaps unsurprising as the development studio in Perth aren't working on it, because they aren't getting paid.
  • Since January 2008, Interzone has not paid any superannuation to its staff, which is illegal under Australian law.
  • Since August 2008, Interzone has been trading without a resident director, which is illegal under Australian law (the director stepped down because he wasn't getting paid, either).
  • Last week Greg Chadwell and Mike Turner, who were holding Director positions at the Perth studio, resigned from their positions quietly. In their place Marty Brickey has been installed as resident director - a complete farce as he hasn't set foot on Australian soil in almost two years and has no intentions of doing so, given the company is facing liquidation. ASIC, the government body responsible for this sort of thing, clearly aren't checking their facts.

Interzone's Perth Studio has debts to the Australian Taxation Office totaling over $1 million AUD. Marty Brickey has confirmed that he has no intention of paying those debts with any of the current funding that has been secured. [A big accusation and we have no confirmation ourselves that Brickey would have 'confirmed' such a course of action, and would almost certainly deny this publically — but this is the belief of Tim Colwill] . As a result of this, the Perth studio can be issued with a closure notice from the ATO as soon as this coming Monday February 15. Happy Valentine's Day.

Interzone has debts to its employees, ex- and present, in salary, entitlements and superannuation, totaling over $500,000 AUD.

And all that aside, here's where it gets interesting.

Marty, Greg and Mike have used the Interzone Futebol product, as developed by the Perth Studio through unpaid labour, to secure additional funding that is believed to be in the millions. They have used this money to set up a studio in Ireland called Big Collision Games (http://www.bigcollisiongames.com/). Their website purports to be publishing the "Futebol" game through this European publisher.

During dealings with the publisher and other partners, Marty, Greg and Mike continually blamed the Perth studio for these missed deliverables, even though the Perth studio had been working without pay for weeks!

Yesterday (Monday the 8th) at a meeting, the Perth staff learned the following:

  • Marty Brickey, CEO and company director, issued an order that all Perth staff are to be immediately suspended without pay.
  • Certain "key staff" have been approached to sign individual contracts to undertake work that will facilitate Mike Turner (who is, at this time, not employed by Interzone in any legal capacity) moving the servers and all IP away from Perth to the USA, and to continue development on the title.
  • If these key staff agree to these individual contracts, Marty has promised that they will pay out the outstanding pay owed to all current Perth employees. Yes, you read the right: if certain staff agree to do extra work, they will pay out the money they already owe.
  • Mike Turner is flying out from the US to Perth mid this week - if he's not already here - and he will immediately begin to back up, and pack up, the servers and files necessary to run the game at its current state, in the USA. Mike Turner is no longer a director of the Perth studio or one of its employees. It is almost certain he will not be in Australia on a business visa. It is almost certain that he has no legal right to perform this action, or to even be on the premises, under Australian law.
  • A company is being contracted to "finish" the IP and bring it to closed beta for the publisher.
  • Marty then promised that if they are able to do all these things, once they have successfully delivered the game to the publisher and it has been published, then, and only then will they consider paying out all the outstanding entitlements to all Interzone employees, past and present.

WHAT FOLLOWS IS SUBJECTIVE OPINION AND NOT FACT

Needless to say, this announcement caused complete and total outrage in the Perth studio. These are people who have been consistently lied to, deceived, and let down by Marty, Greg and Mike. These are people who have stayed true to the company through over a year of inconsistent funding, non-existent technical support, and long unpaid working hours. Many of these are people for whom this was their first job in the games industry, the job that would make or break their career! The dedication, talent, and loyalty of these people have been criminally abused.

And now, after all this, they are being told that they are not good enough, that the game they have put their sweat and blood and tears into over the last three years is going to be taken away from them, and is going to be "finished" by an American company that they have never heard of.

And even worse, this new company is being paid with money that could be used to pay them. If you'll forgive the all-caps, THIS IS INSANE!

Ex-employees like myself have received personal assurances that our debts would be taken care of. I received a personal phone call from Mike Turner on Thanksgiving Day telling me everything would be okay. Now the company is going to be shut down and liquidated by the Australian Taxation Office, and he doesn't care, and I will never see the money that I am owed - nor will anyone else. I was flat-out lied to, messed around, and never received any sort of apology.

And I'm nowhere near the worst-off - one friend of mine is owed nearly $20,000 AUD by Interzone and is currently suing for unfair dismissal after he was sacked for encouraging other employees to speak out about the situation and to pursue official avenues for compensation. How much do you think he will receive from Interzone? I'll give you a hint: it starts with "z" and ends with "ero".

As an unfortunate side effect of this, it is almost certain that the games industry in Perth will be irreparably damaged. The Western Australian government sunk $500,000 into Interzone to get it started, and with the studio now being liquidated, it is a huge disincentive for them to provide any further support to any other companies that might wish to base their operations here.

There are many serious questions that need to be asked of these three mismanaging charlatans, these three amigos of deception, Marty, Greg, and Mike.

  • How did they let this go on for so long?
  • Why have they continued to operate illegally, and trade insolvently?
  • Why aren't they using the money that they do have to pay out the debts they have accumulated?
  • When will the ex-employees in Perth, China and Brazil ever see the money they are owed?
  • Why should anybody trust them, after so many promises of payment and reparation have been broken?

I hope that this information has been helpful to you and that you can take steps to bring it to the public attention. Marty Brickey, Mike Turner, and Greg Chadwell cannot be trusted or counted on.

Anybody applying for work at Big Collision Games in Ireland needs to know this. Anybody that is contracted by them needs to know this. Anybody entering into any future publishing deals with them needs to know this!



Comments

    Daaaamn. And I thought Rockstar treated their employees badly.

    Amen, Tim. A-fucking men.

    Just a tip - the ATO reads this, and has read it. Careful what you say and publish with comments like "no intention to pay"

    About time this story came out, I've been so sick of keeping quiet. Thanks, Tim, for communicating what's been happening in such an awesome and kick-butt manner. I feel sorry for whoever Mike, Marty, and Greg end up sucking in next and hope that nobody finds themselves in the same position we now do due to their incompetency, lies, and failures.

    To be quite frank, I'm surprised at the faith employees blindlessly give to companies who are clearly in financial trouble.

    I urge all of you who have experienced this to learn what you can from this. Remember, it's still a job, after all! Your needs come first!

    <3 ex-transmissioner :)

      I "blindlessly" trust my employer ... I think. Too bad guys. This happened to me once and sometimes you just don't see this kind of behaviour coming.

    Wow... just epic wow. I'm a little stunned.

    I actually applied for a junior programmer position with Interzone Perth at the end of 2007. The pay-rate was something like 13 bucks an hour, but I wanted to be a game developer so badly that I didn't care.

    Turns out I barely didn't have the right skills they wanted, and a few days later, I got offered a job by one of the government branches so I ended up working there instead.

    Looks like I dodged one fricken' epic bullet there. O_o

    But that being said, what does this mean for the future of games developers in Perth? Is there any way to fix this potentially irreparable damage? :(

    Wow, EPIC FAIL. Seconded on SirFlashington, why the hell does anyone put up with crap like this. Srsly what were you all thinking?

    @SirFlashington: blindless faith? What is that exactly? Good point though: The best that can come from these sorts of things is that you learn, and move on.

    All ex-IZ-ers, good luck. It has been a wild ride.

      @paradroid001 - I think I meant blind faith there. my bad ;)

      But, by blind faith I mean the troopers who stay back until 2am working for what they believe in when they haven't been paid.
      I applaud these people's passion, but I've learned to throw the business question into the equasion after being burnt by something similar.

      Look at it this way: The people in charge are running off and starting a new company, with the work these passionate, professionally trained souls have slaved over.

      Fool me once, shame on you. Fool me twice, shame on me.

        Unfortunately, there doesn't need to be a twice. There's a steady stream of replacement first-fooleds to keep scammers like this going.

    @DansDans "no intention to pay" is actually fact and not opinion. Someone, I believe it was Marty, got all offended when the ATO repeatedly asked for their $1mil+ and told them, in as many words, that he was not going to pay.

    It's a sad story, Tim, and good luck to you all.

      He can get "offended" all he wants - the bottom line is I pay my tax, you pay your tax and this company needs to pay their tax. I'm sick of hearing about tax dodgers.

    Mate has been locked out of the system. Horrible news.

    =(

    Reminds me of a great ME quote:
    "Business come here to avoid the second guessing of intergalactic law"
    "And I represent the second guessing of intergalactic law."

    I'm saddened by the fact that Perth game dev is going to suffer some damage from this. Thanks for the full report Tim. Unfortunately, scenes like this aren't uncommon enough.

    Have you looked up GEERS? http://www.deewr.gov.au/WorkplaceRelations/Programs/EmployeeEntitlements/GEERS/Pages/default.aspx

    From what I understand, the government will cover any unpaid wages (in Aus anyway)

    I'm a Perth developer (http://www.GameRanger.com), but stayed well clear of Interzone and warned everyone I knew to do the same. I expected something like this from the beginning with the kind of garbage their PR was spewing:
    http://bit.ly/dfwOfc

    Unfortunately, it means the WA government is going to think twice before giving grants or even encouraging game development again.

      It is such a shame indeed.
      There was a chance to change something.
      A chance to achieve and make a serious gaming company in Perth. Now not only has that chance been blown miserably but it has also backfired against all game developers in Perth.

      The government already doesn't care about anything other then mining. Now we are really screwed...

    I'm surprised any of this got published with the state of defamation laws in Australia. But I'm glad it did. Here's hoping someone can step in to help those guys and f*** the American arm that seems to be cashing in.

    sounds like what you need to do is get a general concensus of the workers in perth and hire a lawyer to setttle this.

    do not under any circumstances allow that guy from the US into the building. move the servers away and lock it if you have to.

    This disgusts me in so many ways. I really hope those 3 'managers' get what they deserve. I also really hope that the employees get what they are owed.

    Its sad and i hope that everyone recovers whats owing to them... If i was there id format the entire system so they couldn't access all the assets :P But thats just evil me speaking :P :P

    Grab all the servers and hide them somewhere.

    @Scott Kevill - Things may not have turned out the way they ideally would (ok let's face it - things are craptastic), but I for one am glad that I got the opportunity to work with so many awesome people at Interzone. Sure, we got screwed over - but if I could go back in time I still wouldn't change a thing.

      Tea Time!

      Sure, I don't doubt that. It's just a shame when good people are far too trusting and get screwed by bad people.

    Just wondering why Robert Spencer's name didn't come up in this discussion. I seem to recall him founding Interzone - did he pull out before this started and move on?

    @linkedin http://au.linkedin.com/in/ahrjay

      Rj was another big bad monster, but was effectively neutered by the bigger, badder monsters mentioned by Tim. Avoid all four of these chumps.

      Yeah, there's some of his spin/lies in an article I linked further up the page. Ironic that he's also with a company named Spinfast.

      He still has himself listed on LinkedIn as part of Interzone, and as an "Adjunct Professor" at Murdoch University. I wonder what Murdoch thinks of this mess?

      I haven't held any position with IZ for two years now. We set up Spinfast quite some time ago as a completely separate developer, working on iPhone titles. We haven't had the easiest time with investors being wiped out by the GFC but we've shipped games and they are doing reasonably well.

      another interesting article: http://tinyurl.com/yebxo34

      "Mr Spencer spends his time jet-setting across the globe, working in some of the world's most intriguing cities as he and his creative teams develop..."

      maybe that's where their money was going...

      Robert Spencer[?] I was art director for 1 month before smelling his bull crap and decided to resign, took a couple of weeks before I even got paid for my services and he has still not paid my superannuation, which although a small sum is owed to me. He has also not issued any employment agreements from Spinfast to employees, and one of my friends who worked for him in the same company is also owed months of back salary from Robert. His staff at Spinfast are going through a similar things that the guys from IZ went through. I hope all 4 of them leave the industry, they just leave a bad smell wherever they go.

      Well bobsmith, I think that its a bit harsh to share the blame with someone that left the company such a long time ago. Unless you are suggesting that it was a flawed vision to setup a game studio in Perth? I applaude the goal to harness the skills in perth for game development, I don't think its reasonable to suggest that anyone should have predicted the GFC, and certainly not for the actions of a company 2 years after they left!

        I agree - whatever your thoughts on RJ, he's not (to my knowledge) linked in any way to the current fiasco with Interzone.

    Regarding the ATO debt and the Staff debt, I have been in a similar situation and the ATO was forced to actually refund some money so that staff entitlements could be met. Something along the lines of that when the debt was paid to the ATO the staff were actually higher up the list of debtors.

    I think one of the key things to remember here is that the situation has been building to this for quite some time and many senior staff (most of whom have now moved on) have been working very hard to attract new investors and owners to try and ensure the game can be finished and staff are treated properly. Unfortunately with the GFC, this was an extremely difficult uphill battle and was ultimately unsuccessful. It's a real shame the game couldn't be finished in Perth.

      Unfortunately with the GFC, this was an extremely difficult uphill battle and was ultimately unsuccessful. It was also illegal, exploitive and dishonest.

      IZ Corporate are utterly and completely morally bankrupt.

    they're up shitcreek without a paddle.

    Attempts to recover money legally through the courts have been completely ignored by directors. I personally have a minor case claim against them as a former employee (now forced to leave the country as my sponsorship was tied to the job) and am finding the government and legal system to be of NO HELP whatsoever.

    Not only is it a shame when these people do these things, but it's frustrating when there is no system to protect the employees. Most of us WERE fighting against it from early on, but when we went to the state government, it's really like no-one was listening. I certainly felt and still feels that way to me.

    Good luck everyone, and hopefully this sorry episode won't sour everyone's opinions on what was essentially an excellent group of people in WA.

    Sounds like the affected workers should call the Ombudsman and if it's a certainty that the jobs are gone let the ATO know what the assholes from the US are doing with the content and server gear. Maybe the ATO investigators will come around sooner and catch them in the act.

    Failing all that, I heard ice picks and hammers are really good at smashing computer equipment.

      The Ombudsman has already been made aware of the case, via Julia Gillard's office. Unfortunately though, most of these agencies move in timeframes of weeks, rather than days. That's kind of how these guys got away with it for so long.

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