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THQ files for bankruptcy protection, arranges sale

THQ files for bankruptcy protection, arranges sale

Wed 19 Dec 2012 7:24pm GMT / 2:24pm EST / 11:24am PST
Business

Publisher will continue operations uninterrupted as it plans to sell "substantially all" of its assets; Clearlake Capital Group offers $60 million package

THQ has voluntarily entered Chapter 11 bankruptcy as part of a process to sell off substantially all of its assets. The publisher today announced that it has entered into a deal with Clearlake Capital Group that will see the firm act as a "stalking horse bidder" for THQ.

Clearlake's offer totals roughly $60 million, although its stalking horse status means other parties can submit competing bids. If none do, THQ has asked the bankruptcy court to finalize the sale to Clearlake in 30 days.

THQ has said it will continue to operate as usual in the interim, pending court approval. The company's four studios will continue to operate, its employees will continue to be paid, and consumers and retail partners should not notice any changes. The publisher also specified that no layoffs are planned as part of the plan.

Through the sale process, THQ will be allowed "to shed certain legacy obligations and emerge with the strong financial backing of a new owner with substantial experience in software and technology." In conjunction with the sale, the publisher has also obtained financing commitments of about $37.5 million from Wells Fargo.

THQ indicated last month that it was negotiating "financing alternatives" with an unnamed sponsor. At the same time, the publisher announced that its CFO Paul Pucino was resigning from his post after four years, with no replacement named.

16 Comments

We all hope that Chapter 11 bankruptcy protection will force a better executive approach to business - I would also wish those in the studios to be 'sold' the best in the current conditions. I just wonder what this says about the viability of the current star system of publisher / developers - is there any good business examples - especially ones that do not have to depend on KS projects to fund their operation?

Posted:A year ago

#1

Paul Jace
Merchandiser

924 1,379 1.5
I doubt anyone will offer more than 60 million for them as even thats probably atleast twice as much as what they are currently worth.

Posted:A year ago

#2

Andrew Goodchild
Studying development

1,241 400 0.3
@Paul, not if it means they don't come with the debts that are driving the price down.

Posted:A year ago

#3

Greg Wilcox
Creator, Destroy All Fanboys!

2,174 1,124 0.5
Damn. Lost another bet, as I thought they'd at LEAST make it into 2013 before this happened. Well, let;s hope the properties get picked up by good hands and are delivered to gamers as polished products. Hm. I should probably buy Darksiders II for the Wii U, as it's supposed to be quite good.

Posted:A year ago

#4

David Radd
Senior Editor

359 78 0.2
I just hope that they remain afloat long enough that the South Park game comes out - that game has huge potential.

Posted:A year ago

#5

JT
QA

26 17 0.7
Metro: Last Light please quick!

Posted:A year ago

#6

Aaron Brown
BA Computer Science Student

56 21 0.4
I hope thq can stay afloat and remain relevant as a publisher in some way shape or form. There is definitely light over the horizon for them. Their confirmed IP Metro Last Light, Company of Heroes 2, and the South Park game all look like good games with solid profit potential.

Posted:A year ago

#7
>"The president of THQ says that the publisher's filing for bankruptcy protection and a proposed purchase by investment firm Clearlake Capital Group "does not mean the end of the THQ story or the end of the titles you love," in a letter to the community posted by Jason Rubin."

Edited 1 times. Last edit by kevin williams on 20th December 2012 2:34am

Posted:A year ago

#8

Shane Sweeney
Academic

365 292 0.8
Well given another 30 years all the big video game publishers will be owned by the old media companies, is it time for the likes of a Disney or GE to buy a video games division?

Probably not yet.

Posted:A year ago

#9

Dan Howdle
Head of Content

280 810 2.9
People's jobs, lives, livelihoods. That's what's important here.

Whether THQs games still make it out of the door is a secondary, comprehensible concern, but taking the role of 'Captain Hindsight' and assigning blame with I-told-you-so snarkiness is in, quite frankly, appalling taste.

Edited 1 times. Last edit by Dan Howdle on 20th December 2012 8:13am

Posted:A year ago

#10
The potential positive is, THQ can offload and slim down and re emerge as a publisher/developer of quality games

Posted:A year ago

#11

Rick Lopez
Illustrator, Graphic Designer

1,269 942 0.7
I am praying very hard for saints row 4...

Posted:A year ago

#12

Rick Lopez
Illustrator, Graphic Designer

1,269 942 0.7
Im ok with the sale, I just hope whoever buys the company, leaves the temas and studios the same. They put ou really good games. i just think THQ just doesnt have the muscle to push there products out the door like activision or EA can. I clearly love Saints Row more than Grand Theft Auto. And Darksiders should get a 3rd game. I played Saints Row the 3rd twice, from beginning to end. And I really cant put it down. Sometimes Ill find myself popping it in my console again to give it a go.

Posted:A year ago

#13
I'm taking odds on:
- Atari
- Ubisoft
- Rockstar
- Activision

Posted:A year ago

#14

Laura Roberts
Manager

6 0 0.0
Wishing the employees at THQ the best.

Posted:A year ago

#15

Greg Wilcox
Creator, Destroy All Fanboys!

2,174 1,124 0.5
Well, Dan... maybe if things would change so that companies can't file for Chapter 11 until they help their soon to be former employees move onto new employment (even at the cost of the salaries of executives who often get a nice package and a safe, soft landing), there wouldn't be ANY shark.

Sure, I'm betting there's not too many CEO's and such who'd give up a year's pay (or more) or make investments in people over product so that the many working for and under them would be able to eat and pay rent after if they can't get a new job in a timely manner. That said, perhaps we'll see a shift to actual humane business practices (at leat in certain industries where no one cares about the little guy until they're losing their jobs)...

Posted:A year ago

#16

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