The lights are on
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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The idiocy of "need to bay back their debt" when filling for bankruptcy and wanting to keep the company in business to you know...make money, that THQ can THEN get together the $.
Laws sure do like to make things complicated
Having personally gone through a business bankruptcy myself in the last year, it's very stressful and the most confusing process that I have ever been through. Funniest part is a small consolidation loan would have kept me from it. The laws placed on banks and the harsh lending restrictions may have contributed to THQ's current situation. Good luck.........
Man, THQs bankruptcy might get even messier than the Infinity Ward debacle by the end.
And now the ravenous wolves fight over who gets poor old THQ as they tear scraps from the corpse.
Folks, keep in mind that if making video games were consistently profitable for them, they wouldn't be going into bankruptcy. It's not as simple as "continue to let them stay in business so they can pay off the debt." THQ staying in business is exactly what their creditors are afraid of, as it seems to be a good way to lose money lately.
On the other hand, this could open the door to a fascinating discussion regarding development COSTS as a factor in a studio's or game's profitability, rather than just focusing on sales / DLC / etc.
this whole story is sad because THQ was actually making good games, the most fun I've had in games in the last five years have probably been with THQ games, but people don't buy those great games, because people are stupid, so good games go unplayed and one of the best game companies in terms of quality output is going out of business and who the hell knows whats going to happen to those franchises I had such great experiences with? this isn't a matter of they screwed up, its a matter of they did spectacular but no one cared and they failed because of it, its sad because it's unfair that companies like Activision can churn out crap and be successful while a company like THQ that takes risks and tries new things falls apart, but that's what its come to
While I am not a fan of THQ games, I feel that this article, and the overall situation with THQ, can help gamers better understand the nature of what the videogame industry has become in some regards.