Sega and Gearbox have said a class action lawsuit alleging Aliens: Colonial Marines was falsely advertised is without merit. The suit was filed in the Northern District of California court by law firm Edelson LLC on behalf of Damion Perrine, Polygon reports.

Citing multiple California civil and business codes, the plaintiff claims Sega and Gearbox falsely advertised the game by showing off demos at events like PAX and E3 which weren’t accurate representations of the final product. The plaintiff is seeking damages for consumers who purchased the game before the discrepancies between the demos and the released product were publicly known.

Responding to the lawsuit, Sega told Kotaku: “Sega cannot comment on specifics of ongoing litigation, but we are confident that the lawsuit is without merit and we will defend it vigorously.” Gearbox also said: “Attempting to wring a class action lawsuit out of a demonstration is beyond meritless. We continue to support the game, and will defend the rights of entertainers to share their works-in-progress without fear of frivolous litigation.”

Last month, Sega acknowledged complaints sent to the UK’s Advertising Standing Authority regarding ‘misleading’ Aliens: Colonial Marines adverts. The company agreed to include disclaimers on its website and in all relevant YouTube videos explaining that the trailers depict footage of demo versions of the title. Shortly after, Sega confirmed that a Wii U version of Aliens: Colonial Marines had been cancelled.

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Section 8 studio and Aliens: Colonial Marines co-developer TimeGate has filed for Chapter 11 bankruptcy protection. Polygon reports the Sugar Land, Texas-based studio filed on Wednesday with total liabilities ranging from $10 million to $50 million.

Its top creditors include Epic Games, from which it licensed the Unreal Engine, among other gaming services and developers. TimeGate also owes an “unknown” amount to Section 8 publisher Southpeak Interactive, which Polygon says is likely its most significant liability.

The studio, which was formed in 1998, even owes a local pizzeria $34.80.

It’s been a rough few months for TimeGate. Besides working on the roundly panned (sorry, we’re still thinking about pizza) Colonial Marines, it also owes $7.35 million to Southpeak for compensatory damages related to Section 8.

TimeGate reportedly laid off about 25 employees in March.

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Aliens: Colonial Marines co-developer TimeGate Studios has confirmed a recent round of layoffs at the company.

While the Houston, Texas-based firm didn’t detail the extent of the cuts, Polygon sources indicate that about 25 employees were let go following the collapse of a publishing deal.

TimeGate president Adel Chaveleh told the site: “Today, we had to make the difficult decision to let go of some great game developers. This is never easy, and we’re doing all we can to assist those developers affected. TimeGate is preparing, as is the entire industry, for the transition to next-generation consoles and new business models. As part of this reinvention, all projects and strategic initiatives continue to move forward at the studio.”

Formed in 1998, TimeGate has worked on a number of FEAR expansions, developed the Section 8 series, and most recently assisted Gearbox on its poorly received Aliens FPS. In our Aliens: Colonial Marines review we said the game “is like a trip to a natural history museum. It’s empty and nostalgic, meticulous and dated.”

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