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US Trustee And Creditors Object To THQ Bankruptcy Sale
THQ recently filed for Chapter 11 with the intention of selling to Clearlake Capital Group, however a recently objection by creditors and trustees have complicated the sale.
You can go read about the complicated legal objections at Scribd, but the gist seems to be that certain parties have objected to the 30-day window of the sale of THQ, saying that this is not a long enough period of time to provide other companies a chance to offer a bid. US Trustee Roberta DeAngelis' official objection also took issue with the fact that THQ's plans to award $2.25 million to Clearlake in the event that another company wins the bid; this amount is far too large for a sale of this sort, she says in her legal filing.
Distressed Debt Investing also reported yesterday that a consortium of THQ creditors, called the Ad Hoc Committee of Convertible Noteholders, also filed a similar complaint stating that THQ's filings have focused too much on keeping the company in operation and not on paying back its debts. Check out this little gem of a quote:
"During this 'process,' the Debtors and their advisors focused their attention on contacting 'growth-oriented' financial investors (i.e., venture capital and private equity firms) and, by marketing the company as a whole, effectively precluded strategic investors from participating in a sale process. The financial investors that the Debtors and their advisors did approach included only a few firms known for 'distressed' investing, which likely further hindered the process."
A hearing is already scheduled for tomorrow, so we'll see if anymore clarification comes out of that.
[Source: Games Industry via Joystiq]
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