Update #2: THQ President Jason Rubin has posted a blog outlining what today's events mean for THQ, its studios, and the games the company is working on.

In a lengthy post addressed to the gaming community, Rubin explains what filing for Chapter 11 means for THQ and why they chose to do it the week before Christmas. Rubin once again stresses that all of the games THQ is currently working on are still on schedule. "The most important thing to understand is that Chapter 11 does not mean the end of the THQ story or the end of the titles you love," Rubin writes. "Quite the opposite is true, actually."

You can read the full post at THQ's website.

Update #1: THQ President Jason Rubin has tweeted a response to the news, reassuring his followers that the company's upcoming games are still on track.

Jason Rubin has posted the following message on his Twitter account:

"On track for big releases. Busy schedule ahead. @Companyheroes, @MetroVideoGame, @SouthPark #StickofTruth still on schedule"

Original Story: THQ just announced that it is filing for Chapter 11 and plans to sells all of its assets.

THQ announced that Clearlake has stepped in as the "stalking horse bidder" for the sale, which includes all four of its studios as well as the games they are currently working on. A stalking horse bid (as defined by Investopedia) is the first bid on a bankrupt company's assets, and is designed to prevent the troubled company from being low-balled. In essence, it sets a minimum price – in THQ's case, roughly $60 million – for the company. Other companies are now free to make higher bids for THQ to consider.

The studios for sale are Volition (Saints Row), Vigil Games (Darksiders), THQ Phoenix, and THQ Wireless.

The press release notes that THQ's foreign studios are not included in the agreement, which includes Relic Entertainment (Warhammer, Company of Heroes) and THQ Montreal, where Patrice Désilets is currently working on an unannounced project. The press release also states that THQ will continue working uninterrupted as the sale proceeds. THQ Chairman and CEO Brian Farrell characterized the Chapter 11 filing and sale as the "...necessary next steps to complete THQ's transformation and position the company for the future..."

THQ's financial troubles have been apparent for months, and led to the publisher practically giving away many of its recent titles in a THQ Humble Bundle. We hope the sale will provide the company and its studios the financial stability it needs to continue making games for its fans.

Here is the press release in full:

THQ Inc. Secures Asset Purchase Agreement with Affiliates of Clearlake Capital Group, L.P.

Clearlake Offers to Acquire THQ's Assets Via Section 363 under Chapter 11;
Company Obtains Commitment for Interim Financing to Fund Operations Without Interruption

AGOURA HILLS, Calif.--(BUSINESS WIRE)-- THQ Inc. (NASDAQ: THQI), a leading worldwide developer and publisher of interactive entertainment software, today announced that it entered into an Asset Purchase Agreement with a "stalking horse bidder," affiliates of Clearlake Capital Group, L.P., to acquire substantially all of the assets of THQ's operating business, including THQ's four owned studios and games in development. The sale will allow THQ to shed certain legacy obligations and emerge with the strong financial backing of a new owner with substantial experience in software and technology.

To facilitate the sale, THQ and its domestic business units have filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Court for the District of Delaware. The company's foreign operations, including Canada, are not included in the filings. The company has obtained commitments from Wells Fargo and Clearlake for debtor-in possession (DIP) financing of approximately $37.5 million, subject to Court approval.

THQ will continue operating its business without interruption during the sale period, subject to Court approval of THQ's first-day motions. All of the company's studios remain open, and all development teams continue. The company remains confident in its existing pipeline of games. THQ maintains relationships with some of the top independent development studios around the globe. As part of the sale, the company is seeking approval to assume the contracts of these studios, and Clearlake will assume these contracts.

"The sale and filing are necessary next steps to complete THQ's transformation and position the company for the future, as we remain confident in our existing pipeline of games, the strength of our studios and THQ's deep bench of talent," said Brian Farrell, Chairman and CEO of THQ. "We are grateful to our outstanding team of employees, partners and suppliers who have worked with us through this transition. We are pleased to have attracted a strong financial partner for our business, and we hope to complete the sale swiftly to make the process as seamless as possible."

According to Jason Rubin, who joined THQ as President last May, "We have incredible, creative talent here at THQ. We look forward to partnering with experienced investors for a new start as we will continue to use our intellectual property assets to develop high-quality core games, create new franchise titles, and drive demand through both traditional and digital channels."

Clearlake has agreed to serve as the "stalking horse bidder" for a Section 363 sale process, which allows other interested parties to come forward with competing bids. Aggregate consideration offered by Clearlake for the purchase totals approximately $60 million, including a new $10 million note for the benefit of the company's creditors. The company is asking the Court for a schedule to complete the sale process in about 30 days.

Consumers and retailers should see no changes while the company completes a sale. The new financing will support business operations throughout the period. THQ does not intend to reduce its workforce as a result of the filing, and employees will continue to work their usual schedules and receive normal compensation and benefits, pending customary Court approval.

As is the case after a Chapter 11 filing, THQ expects to receive notice from NASDAQ informing the company that its shares will be delisted from the exchange within nine calendar days of notification.

THQ is being advised by Centerview Partners LLC and FTI Consulting as its financial advisors and Gibson, Dunn & Crutcher as legal counsel. Clearlake is being advised by DLA Piper as legal counsel.