I dont think Interplay is going to lie down and die just like that...here is what I found..:
State regulators shut down Interplay
By TAMARA CHUANG
The Orange County Register
The state labor department shut down Interplay Entertainment Corp. today after discovering the computer game developer had no workers’ compensation insurance and failed to pay employees on time.
Five employees filed complaints this week with the state’s Department of Industrial Relations, Division of Labor Standards Enforcement claiming Interplay hasn’t paid them several thousand dollars in wages in the past month. Interplay resolved two employee complaints over bounced paychecks in April.
"We’ve got seven claims in, which is enough for us to believe that the problem goes beyond these seven employees," said Dean Fryer, spokesman for the California Labor Commissioner, adding that 14 employees were at the Irvine office on Friday.
The labor agency also fined Interplay $79,000 - $1,000 for every employee found on the payroll.
"An employer has responsibilities when they open a business. The responsibilities include proper and timely payment of wages. It includes providing workers compensation coverage in case there are injuries. If the employer cannot accommodate those basic issues of doing business, we cannot allow employees to work," Fryer said.
Interplay is facing eviction from its landlord, Arden Realty, which hasn’t received a rent payment on the 81,000-square-foot space since January. Interplay, which has said it will run out of money by July, also owes $179,000 in payroll taxes and penalties, according to regulatory filings.
Herve Caen, Interplay’s CEO, said the company plans to reinstate its workers comp as soon as possible.
"The company has not shut down. (The state) can’t do that. It can only let me not let employees work," said Caen, adding that Interplay will move to a smaller office in mid-June. "I hope to have that (insurance) back by Monday or Tuesday."
Interplay, one of the hottest game companies in the 1990s with "Baldur’s Gate" and "Fallout," dwindled to 79 employees from 500 in its heyday. Nasdaq delisted its stock in 2002 because the price fell below $1. Interplay’s shares, which trade over the counter, closed Friday at 5 cents.
The company ended 2003 with net income of $3.3 million on revenue of $11.5 million in the fourth quarter. A year earlier, it had a loss of $5.4 million on $7.1 million in revenue. With only $1.2 million in cash in December, the company said it might run out of money before July.
Caen cut costs and sold off assets, including its right to develop popular games. But even as Interplay reported a profit in December, the company unexpectedly lost a $3 million cash payment from its distributor earlier this year, Caen said. That resulted in the lack of money to pay the rent and employees.
"They didn’t warn us when we had cash in the bank," Caen said. "It’s not going to kill us but it created a lot of consequences going forward."
On April 9, Arden Realty gave Interplay three days to pay its rent or surrender possession. A week later, Arden sued for $431,823 in back rent.
On Thursday, a state judge ruled in Arden’s favor, said its attorney. Interplay’s lawyer, Christopher J. Nelson, could not be reached.
The company’s front doors have been locked all week, while the interior lobby appeared desolate to anyone peering through the glass doors. Only a handful of cars were parked behind Interplay Entertainment’s headquarters on Von Karman Avenue.
Loyal employees continued to show up for work this week, although they said they haven’t been paid for a month.
"The reason I stick around is that I’m a diehard loyalist and I love the people I work with. If there is any sliver of hope that Interplay may someday turn around I want to be there to see it," said Steve Jobes, Interplay’s Internet Systems manager, who was at work today.
"The people I work with in my department are basically family to me and it’s very hard to let go. While I may be holding onto a fool’s hope at this point, I’d like to give Interplay every last chance I can to turn things around before I jump ship.
Phearuth Tuy, a 3D animator who started at Interplay in December, worries about finding a new job. He left Utah for his current position. He’s also bound to a contract, which says he must pay back a $2,000 signing bonus if he leaves before 18 months.
"I want to finish the game I’m working on and I like how it’s been going on (at Interplay) so far," said Tuy, who also was at work Friday. "But it’s unfortunate that (the lack of paychecks) has gone on for this long."
Not paying employees is a violation of the state labor code, said Fryer, with the state Labor Department. Employees have also said they aren’t getting health benefits. The only remedy, he said, would be for Interplay to get workers’ comp insurance and start paying its employees.
Matthew Sarinas, a quality assurance tester at the company, filed a complaint with the state agency June 2. He wrote: "Paychecks have been habitually late or skipped and we where [sic] asked not to show up for work for two weeks. When we were asked to return, we were given a 100% guarantee that all back pay would be caught up, it is now a month later and as of right now two paychecks are outstanding and a third is due in the middle of June."
Sarinas, along with other employees who contacted the Register, said they were told to take their belongings home in case the building was locked today by the landlord.
Luke Haase, Interplay’s spokesman, confirmed that Interplay is behind on paying some employees. "Some payments have been missed. Some back payments have been made," Haase said. "The company is still behind. A majority of employees are still coming in to work. It’s their choice." Haase has high hopes. Interplay hired SG Capital in April to raise money or sell the company. "From what I’ve seen, there are a number of options the company is working on," Haase said. "Fortunately or not, it’s a domino effect. Once one piece is in place, the others will fall into place. ... Bankruptcy is not in the top five options." Employees with salary or benefit concerns can download a complaint form at
www.dir.ca.gov/dlse or get one in person at the division’s local office, Room 625 at 28 Civic Center Plaza, Santa Ana. Employees can also call the U.S. Labor Department at (866) 4US-WAGE (for wages) or (866) 444-3272 (for benefits).
