In court documents filed this week, bankrupt video game company THQ is suing Zuffa, LLC — owner of the Ultimate Fighting Championship — for alleged fraudulent activities in a settlement they reached for rights of the UFC game, which eventually landed at EA Sports.
THQ filed for bankruptcy protection in December 2011, but prior to that time they had come to a $10 million settlement agreement with the UFC for their video game rights.
According to the lawsuit filed in Delaware, THQ alleges that after negotiating with EA on a possible buyout for the company, when talks broke down the company then told Zuffa of the financial struggles the company was undergoing and the two entities moved to secure the rights of the UFC video game.
THQ settled on the $10 million agreement with the UFC, but now claims "fraudulent transfer" occurred due to the brand being worth much more than the settlement paid, but also because of the information exchanged about the company’s financial struggles disclosed by EA to the UFC.
“EA solicited Zuffa to terminate the UFC license and/or informed Zuffa of THQ’s financial condition, in violation of a confidentiality agreement, in order to procure the termination of the UFC license,” the complaint stated.
The lawsuit alleges that two weeks after talks of a potential sale of THQ to EA that they received a letter from Zuffa threatening to break off their relationship due to the company’s financial situation.
In essence, the suit is stating that EA told Zuffa about THQ’s financial problems so they could get the rights to the UFC game back, and then take them to EA for a new version to be produced.
THQ is asking for "true value plus interest" for the UFC video game franchise, which they believe far exceeds the $10 million settlement they first agreed upon.
The lawsuit was filed in the U.S. District Court in Delaware.