Epic Games and Silicon Knights have been locked in a courtroom battle since 2005, based on an alleged breach of license agreement. Silicon Knights claimed that Epic had breached an agreement, and Epic hit back with counter claims that included copyright infringements and misappropriation of trade secrets.
Epic were awarded damages of $4.5 million Dollars back in 2012, but following a later court ruling, and the new rejection of appeals from Silicon Knights, the company now owes Epic Games around $9.2 million Dollars. Polygon track the complicated case history here.
The company seems to have more or less be liquidated, following an asset sale and the departure of almost all of the employees. Epic Games will be lucky to re-coup much at all from the company. Indeed, most of the former Silicon Knights employees are now working for Precursor Games, who have already failed with a Kickstarter project to launch an Eternal Darkness sequel – on two occasions!
It now seems highly unlikely that Silicon Knights will have the means to foot this massive bill. This could still get ugly with debt collectors getting involved, but hopefully this latest court ruling will put the issue to bed for good.