Video Game Developer THQ Files Bankruptcy
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UPDATED: Dec 21, 2012
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Video game publishing company THQ, may be filing for Chapter 11 bankruptcy but they don’t see it as a bad thing. The developer responsible for games like Homefront, Saints Row and the upcoming South Park: The Stick of Truth, is viewing their filing as a fresh financial start, according to this week’s press release.
Investment group Clearlake Capital is set to buy the gaming company’s business and majority of assets for $60 million. Reports indicate that the production of THQ’s video games will not be affected by the filing. Chapter 11 bankruptcies are intended to allow companies to proceed with operations while creating a manageable debt repayment plan.
Chapter 11’s have been common among many U.S. businesses this year and over the past few. Big name companies like General Motors, Hostess, Delta Airlines and Macy’s have all filed. Once a business has entered Chapter 11, other companies and investment groups can place bids to obtain remaining assets; one winning bidder, or multiple bidders, buys the struggling company, providing the financial means for operations to remain underway. This is known as the bankruptcy auction or bankruptcy sale. This is usually an amicable and mutually-beneficial transaction that is welcomed by the interested parties. Video game fans can take comfort in knowing that while the THQ’s bankruptcy sale comes just before the holidays, consumers can still purchase their favorites.
With reports of a troubled few years for THQ, with layoffs and financial setbacks, the bankrutpcy is being embraced as a step forward. CEO Brian Farrell says in the press release that company is “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.”