Playlogic files for bankruptcy
Publisher blames late payments and tough conditions after continued losses
Dutch publisher Playlogic has filed for bankruptcy, a filing at the US Securities and Exchange Commission has revealed.
Yesterday the publisher denied it was bankrupt, but later the board of directors confirmed it had voluntarily entered into 'surseance van betaling', the Dutch equivalent of Chapter 11, for both Playlogic International and its development studio Playlogic Game Factory.
"Tough market conditions, late payments by large customers and the delays in projects have forced the company to seek protection under the Dutch bankruptcy laws," confirmed the company.
One of those late payments is from distribution partner Koch Media, which Playlogic is taking to court for unpaid bills totalling 1.7 million.
In the first quarter of the year the firm made a loss of $2.2 million, after losing over $20 million for the full 2009 financial year.
ITEM INFORMATION: Bankruptcy or Receivership
Playlogic Entertainment, Inc. (Nasdaq OTC: PLGC.OB), an independent worldwide publisher of entertainment software has announced today that it is has voluntary requested a delay of payments, ‘surseance van betaling’, the Dutch equivalent of Chapter 11, for its subsidiary Playlogic International N.V and her wholly owned subsidiary Playlogic Game Factory B.V.
For the SEC filing Playlogic used the word 'Chapter 11', since it is the closest equivalent in US law to 'surseance van betaling'. When you file for Chapter 11, in most instances the debtor remains in control of its business operations as a debtor in possession, and is subject to the oversight and jurisdiction of the court. Just like in the case of 'surseance van betaling'. As with other forms of bankruptcy, petitions filed under Chapter 11 invoke the automatic stay of § 362. The automatic stay requires all creditors to cease collection attempts. This is also similar to surseance van betaling'. And in the case of Chapter 11 a company can reorganize and continue to exist. Whereas under Chapter 7 a company will be liquidated and cease to exist. Chapter 7 would be the closest equivalent to a Dutch bankruptcy.
So even though I have to admit that it doesn't look good, Matthijs is right. Playlogic is not declared bankrupt yet under Dutch law. And Dutch law is applicable in this case since both the Playlogic International NV and Playlogic Game Factory BV are Dutch entities.
http://www.sec.gov/Archives/edgar/data/1...