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Interplay faces bankruptcy as debts continue to mount

Embattled publisher Interplay's financial difficulties continue to deepen, as the filing of its annual report reveals that it has failed to meet payroll, rent and tax commitments, and may lose the rights to the Baldurs Gate: Dark Alliance franchise.

Embattled publisher Interplay's financial difficulties continue to deepen, as the filing of its annual report reveals that it has failed to meet payroll, rent and tax commitments, and may lose the rights to the Baldurs Gate: Dark Alliance franchise.

The cash situation at the publisher has worsened to the extent that it is three months in arrears on payment of rent on its corporate headquarters in Irvine, California, and owes almost $280,000 in mix of outstanding payroll taxes and non-payment penalties for those taxes.

The company faces eviction if it cannot meet its rent commitments - and was served with notice to this extent on April 9th. It also failed to meet its payroll obligations in the middle of this month, and has cancelled the bulk of other outgoings, including "property, general liability, auto, workers compensation, fiduciary liability, and employment practices liability."

On top of this, the company has lost the rights to publish Baldurs Gate 3 and other future D&D properties, and it may lose the right to continue publishing its Baldurs Gate: Dark Alliances titles if it cannot settle a lawsuit from Atari which accuses it of failing to pay royalties on the D&D license.

Interplay is also currently in breach of a settlement agreement with Warner under which it owes the media giant some $0.32 million - and having entered into a payment plan to rectify this, is now also in default of that plan.

All in all, the publisher does not expect that its existing cash reserves and current income can sustain its business beyond the second quarter of this year - and as it has been operating without a credit facility since last October, that effectively means that it's curtains for Interplay, unless it can arrange a sale, merger or some form of debt financing agreement. None of those options seem likely, however, since the company is already a shell of its former self thanks to the asset-stripping antics of parent company Titus, and thus is unattractive as a takeover target - or as a going concern.

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