For all you diehard Modern Warfare loyalist I’m sure this is not new for you, as you’ve been following it every step of the way. However for those who did not know court documents filed yesterday by ex-Infinity Ward employees and creators of Modern Warfare series Vince Zampella and Jason West accuse that Activision of setting out to “manufacture a basis” to fire both the founders from the company and to withhold payment of royalties of the game that has made over 1 billion dollars World Wide.

The suit alleges that Activision did not hold up its agreement publishing CEO Mike Griffith signed last March, known as a Memorandum of Understanding (MOU), that gave West and Zampella “creative authority over the development of any games under the Modern Warfare brand (or any Call of Duty game set in the post-Vietnam era, the near future, or the distant future) including complete control over the Infinity WardStudio” and says that no such game can be “commercially released without the written consent of West and Zampella.”

This agreement, which still remains private, also gave West and Zampella the ability to operate Infinity Ward independently and the allowance to develop new intellectual property after the completion of Modern Warfare 2.

The lawsuit states that in the wake of Modern Warfare 2’s success, Activision refused to honor the MOU or the Emplyoment Agreement with West and Zampella, and instead launched a “pre-textual investigation against West and Zampella to create a basis to fire the two co-heads of Infinity Ward before the first Modern Warfare 2 royalty payment.”

The investigation began last month, which the document describes as a very tense and hostile situation between Activision and Infinity Ward employees that were quoted to saying:

West and Zampella were interrogated for over six hours in a windowless conference room; Activision investigators brought other Infinity Ward employees to tears in their questioning and accusations and threatened West and Zampella with ‘insubordination’ if they attempted to console them.

The lawsuit says the results of the investigation were “pre-ordained” and that Activision provided West and Zampella with a list of “trumped up grounds” for termination in a notice of discharge they both received on Monday, March 1, 2010.

This is all very big news considering MLG’s announcement to house MW:2 games and we plan on continuing to keep you, the community, up-to-date as it happens.

Before everyone jumps on the IW bandwagon below is some more food for thought and what might have actually happened here.  This will shake out in court soon.

“The rumor is that Vince Zampella and Jason West, the two senior executives at Infinity Ward was meeting with a competing publisher. This breaches the contract in place between the studio heads and Activision. It is assumed that the contract in reference to in the SEC filing is the one put in place after Activision’s buyout of Infinity Ward back in 2003. Technically IW is a subsidiary of Activision and owned by the publisher.

Infinity Ward was formed by 22 former employees from the same team that created Medal of Honor for EA back in 2002. The rumor is that the two studio execs met with EA recently breaching their contract with Activision. The discussion is speculated to be around a potential coup to extract the “talent” from IW and partner with EA.

Apparently Activision’s CEO Bobby Kotick got wind of it and axed the two IW heads before they could pull their “loyal team members” out of the studio. The “bouncer” types have been speculated to be at IW offices to ensure that the coup does not happen.

The tension between the studio and Activision is said to stem from unpaid royalties from Modern Warfare 2. Its not unconceivable that IW may have tried to do a “Bungie” but Activision was not as graceful as Microsoft.

That is pretty much the extent of the speculations swirling the Web as of now. I’m curious to know how Activision found out about the secret meetings between IW heads and EA. Could it be that these guys are under constant surveillance?”

This morning it was announced the lawsuits have been filed.  For more on that go here.