Fans of TV's military sci-fi series "Stargate SG-1" and "Stargate Atlantis" were upset to learn in 2010 that development had been shut down on Stargate Worlds, a big-budget, online role-playing game based on the shows.

Even more upset were the hundreds of private investors in Stargate Worlds who provided an estimated $50 million to Mesa-based game developer Cheyenne Mountain Entertainment Inc. and its related entities from 2006 to 2010, according to an investor lawsuit and the company's court-appointed receiver.

The primary focus of investor complaints is Gary Whiting, former Cheyenne Mountain chairman and CEO. Whiting already has more than $6.2 million in civil judgments against him from two Cheyenne Mountain investor lawsuits filed in Utah in 2009, court documents show.

A third investor lawsuit, filed in Maricopa County Superior Court in February, seeks about $4 million from Whiting and other former Cheyenne Mountain executives, board members and stock promoters.

The Arizona lawsuit's 17 plaintiffs accuse Whiting of misleading investors in various ways to obtain their cash.

The lawsuit alleges that Whiting:

Created a group of companies to solicit investments in Stargate Worlds, which presented themselves to investors as independently owned firms despite being majority-owned by Whiting.

Along with his fellow stock promoters, falsely told investors that Stargate Worlds was nearly completed and an initial public offering was likely.

Took millions from company coffers and solicited loans from investors that never were repaid.

Whiting has denied all wrongdoing in court documents but has yet to offer a detailed account of his version of events.

Cheyenne Mountain was effectively shut down in November 2010, when movie studio Metro-Goldwyn-Mayer Inc. canceled its licensing agreement for use of the Stargate brand.

Cheyenne Mountain's court-appointed receiver, Keith Bierman of Phoenix-based MCA Financial Group, said company documents show millions of dollars collected from investors were not spent on development of Stargate Worlds and may yet remain in the hands of Whiting and other former company executives.

Bierman, a bankruptcy consultant appointed by the U.S. Bankruptcy Court to try to save the failed Stargate Worlds project, is in the process of liquidating the company's remaining assets. He is seeking the court's permission to investigate the whereabouts of the missing funds in hopes of returning that money to investors.

"There were a significant number of investments that did not appear to come to the company," he said.

Whiting could not be reached for comment on this story. Court documents show he is not currently represented by an attorney.

In November 2010, Whiting spoke to East Valley Tribune blogger Jayson Peters, decrying his ouster from the company by its board of directors, which he described as a ploy to seize his personal assets.

"Besides my personal property, they took my good name," Whiting told Peters. "All I wanted was a fair shake. I founded this company. I'm the brains behind this company. I'm the creative guy behind this company."

Stargate Worlds

In 2005, Cheyenne Mountain Entertainment obtained a licensing agreement from MGM, which owns the rights to the movie "Stargate" and its subsequent TV spinoffs, to develop a "massively multiplayer online role-playing game," or MMORPG, based primarily on the long-running TV show "Stargate SG-1."

The show stems from a 1994 movie starring Kurt Russell and James Spader about the discovery of ancient devices called "stargates" that transport users instantly to other worlds. In the shows, as in the movie, a secret U.S. military operation uses the devices to explore the galaxy and protect Earth from alien threats.

Cheyenne Mountain and MGM announced publicly in February 2006 that a Stargate-based MMORPG titled Stargate Worlds was in development for the Microsoft Windows platform, and that it would be distributed by Cheyenne Mountain subsidiary FireSky LLC.

The MGM licensing agreement included a number of required milestones in the game's development that would have to be met by Cheyenne Mountain to retain the "Stargate" license.

Development on most video games is fully completed before a game's release, but a typical MMORPG is built around a monthly subscription model that involves regular content upgrades and expansions such as new missions and areas to explore.

Because MMORPG players connect through the Internet to shared Web servers housing data for all the game's subscribers, the developer or a licensed third party must maintain and manage those servers on an ongoing basis.

Creating a game that will keep players interested month after month requires a team of hundreds of developers laboring for four or five years on initial development, followed by ongoing work to improve and expand the game, gaming experts say. It's an expensive proposition, but the rewards can be even greater if it's done right.

The most popular MMORPG of all time, World of Warcraft, currently has a monthly subscriber base of more than 10 million users despite being released more than seven years ago, in November 2004. With its monthly subscription fee ranging from $13 to $15,Warcraft's total subscriber revenue since 2004 is well into the billions of dollars.

In early 2008,Stargate Worlds' developers announced that the game would enter closed beta testing in the fourth quarter of 2008 and was on track for an official release in the second quarter of 2009. However, 2009 came and went, and Stargate Worlds never materialized.

In February 2010, Cheyenne Mountain filed for Chapter 11 reorganization in U.S. Bankruptcy Court and laid off the bulk of its staff, documents show.

Just before the bankruptcy filing, the company released an online arena-combat game called Stargate Resistance, which featured just three small areas in which to fight. The game was met with poor sales and mostly negative reviews.

Fraud claims arise

Two years later, Whiting is the primary focus of the multi-investor lawsuit filed in Maricopa County Superior Court in February, which is just getting under way.

The lawsuit, filed by a group of investors who purchased more than $4 million of company shares, alleges negligent misrepresentation, breach of fiduciary duty, common-law fraud and securities fraud.

According to the plaintiffs, led by Missouri-based investment firm Dash Game LLC, Whiting created a complex chain of limited-liability firms to mask the fact that he was acting as both stock promoter and chief executive of Cheyenne Mountain.

For instance, Whiting was a majority owner of the now-defunct Garvick Properties LLC, which was acting as promoter and agent to sell shares in Cheyenne Mountain, the lawsuit alleges.

The plaintiffs said they had been misled by Whiting to believe that Garvick Properties was an independent third party with no ownership ties to Cheyenne Mountain.

The lawsuit also alleges that Cheyenne Mountain and its affiliate companies issued far more shares of stock than investors were led to believe. In all, the company issued more than 500 million shares of stock, according to the lawsuit, which ultimately left each of the plaintiffs with less than 1 percent of the company despite owning millions of shares.

Unknown to the plaintiffs, their ownership stake was subject to further dilution as more shares were sold or given away to company insiders, the lawsuit alleges.

According to the lawsuit, Whiting and the other company officers and directors also falsely promised the plaintiffs Cheyenne Mountain "would be going public, and further, that major financial institutions were interested in bringing it public."

At no time did the executives or board members inform investors that Cheyenne Mountain had fallen "hopelessly behind" the milestones agreed upon with MGM, and that the company was under constant threat of losing the "Stargate" licensing agreement, the lawsuit alleges.

In a typical conversation with investors, Whiting would describe the game's progress as being about 60 days from release, and he often would ask for an additional loan to cover payroll for the remaining two months, according to the lawsuit.

Meanwhile, Whiting was issuing loans to himself from Cheyenne Mountain funds, the lawsuit alleges and Bierman said company documents confirm. In all, the documents show about $2.6 million of unrepaid loans from the company to Whiting.

The lawsuit alleges that Cheyenne Mountain's board members were aware of the loans to Whiting but did nothing to stop them or to alert the investors.

Whiting, in court documents, denies all the allegations but does not offer a detailed rebuttal. He could not be reached for comment.

MGM pulls license

In November 2010, MGM informed Cheyenne Mountain that it was terminating the licensing agreement, citing the developer's failure to meet the milestones toward the game's completion.

By that time, two investor lawsuits already had been filed against Whiting and entities he controlled for the purpose of raising investment capital for the Stargate Worlds project.

Both filed in 2009, they included a Utah County District Court lawsuit filed by investor Nedra McKell that resulted in a $6.1 million judgment against Whiting and companies he had used to solicit investment in the game project, including Garvick Properties, MMOGULS Inc. and Now Corp.

The second 2009 lawsuit was filed in Weber County (Utah) District Court by investor Kade Klinger and resulted in a $150,000 judgment against Whiting and another of his companies, Eden Investment Properties LLC.

After MCA assumed control of Cheyenne Mountain's business affairs in November 2010, it immediately started negotiations with MGM to reinstate the licensing agreement, Bierman said.

Because five years had elapsed since development began on Stargate Worlds, he said, the company would have been forced to start over in programming the game to bring its graphics, complexity and gameplay up to current standards.

MCA had worked out an estimated cost of $18 million to redevelop the game using existing concept art created by the original developers, Bierman said, adding that a group of investors was on board to put in the money if the MGM license could be re-obtained.

But the movie studio opted not to renew the license, he said, thus rendering the project dead. By that point, MGM had lost all interest, Bierman said.

"They had essentially lost confidence in the company's ability to deliver the product," he said. "They just didn't want to be associated with it, frankly."

Game over

With no remaining hope of reviving the Stargate Worlds project, all that's left for MCA to do is sell off the company's remaining assets and try to repay investors as much as possible.

Bierman said his firm has yet to assess the total value of those assets, but he indicated that it would not come close to repaying the $50 million in claims MCA has received from more than 500 investors.

Bierman said MCA's final move will be to ask the court for authority to launch its own investigation into the finances of the company's former executives, for the purpose of recovering from them any investor money that might remain.

For gamers posting comments about the Stargate Worlds saga on message boards, the biggest disappointment is that the developers had made a genuine effort to create a great game that now never will be completed.

"There were some talented people there," Bierman said, "but there was a failure of leadership to bring the game to market."