Activision's legal wrangles with ex-Infinity Ward heads Jason West and Vince Zampella, as well as with publisher EA, took a few dramatic twists and turns last night.

First came the news that Activision and EA have reached an out of court settlement, putting an end to legal action between the publishers. Then came the revelation of a court document implicating Activision in an underhand exercise called "Project Icebreaker," designed to force West and Zampella out.

Activision had sought $400 million in damages from EA as a result of disruptions and delays following West, Zampella and 40 other employee's departure from Infinity Ward. West and Zampella currently head up Respawn Entertainment, who have a publishing agreement with EA.

The terms of the settlement have not been publicly revealed yet, but that's not the end of the story. Not nearly. The case between Activision and West/Zampella continues, with the two parties set to go to court at the end of the month. It's sure to be be an explosive case.

Why's that? Because it has been alleged that Activision were attempting to push West and Zampella out of Infinity Ward long before they walked out in 2010. And what's more, Activision CEO Bobby Kotick has been implicated.

A court filing from the ongoing legal case between the two parties shows that Activision's former IT director Thomas Fenady was asked to hack into work email, computers and phones in order to dig up dirt on West and Zampella, eight months before they were sacked and escorted from their offices at Infinity Ward by security staff.

As testified by Fenady, the plan to find reasons to dismiss the pair was referred to internally as "Project Icebreaker."

Fenady says he was advised to undertake the work by Activision's George Rose, who was then chief legal officer and is now chief public policy officer. Rose told him not get caught, but that if he did, "Bobby will take care of you. Don't worry about repercussions."

This is presumably a reference to Activision CEO Bobby Kotick, suggesting that he was not only aware of the order, but supported it.

For his part Rose denies specifically asking Fenady to "dig up dirt." However he does admit to the existence of Project Icebreaker. He testified that the plan was to snoop on the entire company's email as a form of surveillance, not to specifically target West and Zampella.

Fenady also said that Activision considered staging a fake fumigation or setting off a fire alarm in the building in order to buy enough time to either access or copy the information on employee computers.

The assistance of third parties was also requested, said Fenady, but both Microsoft and inGuardians refused to help break passwords without a proper court order.

If the allegations are found to be true, Activision may find themselves in a weak position once the case goes to courts on May 29th. Either way, it's going to be huge.

[via Giant Bomb]