Global Gaming Factory X agreed to buy out The Pirate Bay a couple of months ago for $7.7 million but that deal may fall through. This is because the company was de-listed from the stock exchange because they claimed that they do have the money to acquire the torrent search engine company.

Now former Global Gaming Factory X director and board member Johan Sellstrom claims he is owed hundreds of thousands of dollars by the company. Therefore he requests bankruptcy for Global Gaming Factory X. This is because of an outstanding debt of 1.3 million Swedish kronor ($188,000) that Global Gaming owes to Advate Systems, a company that was started by Sellstrom.

Given the bankruptcy request, it will now become clear whether the deal will go through or fall through. I can’t even imagine what a headache this whole process has been with The Pirate Bay and Global Gaming Factory X. Regardless, Global Gaming Factory X shareholders deserve to know the truth.

Late last month the shareholders of Global Gaming Factory X approved the acquisition of The Pirate Bay. This took place shortly after GGFX Chairman Magnus Berman stepped down. GGFX announced in late June that they would buy out The Pirate Bay for about 60 million kronor which is now the equivalent to $8.5 million. However during the government’s due diligence process, it turns out that several of the financial facts were misstated thus causing GGFX to be kicked out of the smallcap stock exchange in Sweden called Aktietorget.

Global Gaming Factory X breached transparency principles by indicating that they actually had the money to buy out The Pirate Bay, but it turns out that they didn’t raise the funds yet. Takeover offers have not been verified and any negotiations with the music industry were early stage in making The Pirate Bay legit.

Gunther Marder, the head of the Swedish Shareholders’ Association said Global Gaming Factory X has not presented the names of the investors involved with the buy out of the website. Hans Pandeya, GGFX CEO said that he made a mistake when sending out a press released with unconfirmed information, but he claims that he did not lie.

According to The Associated Press, Pandeya said that he will buy The Pirate Bay himself if the investors back out and even called the Aktietorget officials “very weak people.”

In late June, Global Gaming Factory X announced that they plan to acquire The Pirate Bay.  The acquisition amount was around $7.7 million.  However the acquisition was subject to Global Gaming shareholder approval.

Today the shareholders have approved of the acquisition.  Between the time of the acquisition announcement and today, Global Gaming has received a couple of offers for The Pirate Bay.  Napster themselves were rumored to have offered Global Gaming $10 million for The Pirate Bay.

The Pirate Bay ownership will be transferred to GGF within the next month.  GGF CEO Hans Pandeya confirmed the shareholder approval which was reported by TorrentFreak.  However several The Pirate Bay investors decided to pull away from the deal because of all the media controversy.

But GGF shareholders and Pandeya himself will finance the acquisition.  The Pirate Bay will shortly start charging users for access to their service.  Illegal torrents will be removed from the website too.

Global Gaming Factory X Chairman Magnus Berman has stepped down.  This comes at an odd time because Global Gaming Factory is in the midst of closing the acquisition of The Pirate Bay.  Earlier this month, The Pirate Bay co-founder Peter Sunde even stepped down.

It is unclear about why Berman stepped down, but Sunde gave his reason.  Sunde felt that after The Pirate Bay acquisition, his services were no longer needed and that he would pursue another entrepreneurial venture.  Bergman will reveal the reason why he decided to step down on Thursday when the shareholders of Global Gaming Factory votes on whether The Pirate Bay acquisition should go through.

There are rumors about Global Gaming Factory X not having enough money to complete the deal.  This is apparently why the Grokster CEO and Global Gaming Factory X Board member Wayne Rosso stepped down.

Global Gaming Factory made an offer to buy out The Pirate Bay for $7 million about a month ago.  That deal is expected to close soon, but right out of left field another offer for The Pirate Bay has been made.

The offer came from John Fanning, the uncle of Napster founder Shawn Fanning.  John Fanning is the former CEO of Napster.  And Napster was bought out by Best Buy in September 2008 for $121 million.

The Pirate Bay turned down the offer shortly after GGF CEO Hans Pandeya and Fanning discussed the deal in London.  GGF also received a $15 million offer from an unnamed Russian company.  That would more than double GGF’s acquisition investment instantly.

“The basis for a legal site has been placed and contracts are expected to be concluded shortly with a leading player in the entertainment industry. The development of the company is very positive, and goes as planned,” stated Pandeya.

Global Gaming Factory X (GGF) has bought out The Pirate Bay, a torrent search engine website that was recently taken to court for copyright infringement.  Global Gaming Factory also bought out another company called Peerialism, a file sharing service. GGF will be taking over both services in August 2009.

The founders of The Pirate Bay was fined $3.6 million and one year in jail, but tried to appeal the decision because they believed the judge may have been biased.  Check out our extensive coverage here: http://pulse2.com/category/the-pirate-bay/.  The Pirate Bay was bought for $7.7 million.

As part of the acquisition, The Pirate Bay will stop hosting and tracking torrents.  Instead they will use a third party tracking and torrent hosting service.

[via TorrentFreak]