THQ files for Chapter 11 bankruptcy proceedings
December 20, 2012 // 11 a.m.
Games publisher THQ has filed for Chapter 11 bankruptcy protection, as it seeks to sell its assets off to a private investment group.
The deal, which sees THQ's major assets - studios Relic, THQ Montreal, Vigil and Volition, all intellectual property, oustanding contracts and support staff - offered to Clearlake Capital Group, is the company's last-gasp attempt at staying afloat in the face of product delays and negative cashflow. The investment group is to provide cash for the company to keep operating while the Chapter 11 process - which allows for competing bids - plays out, with THQ's president Jason Rubin spinning the process as a positive for his company.
'Clearlake is even providing the company the money it needs to keep working on the products as the process plays itself out. And importantly, when the purchase is complete, Clearlake has committed to invest additional ample capital to let us finish the games we are making and continue making games going forward,' Rubin explained in a statement to press. 'In short, they are investing in a new start for our company.'
While many in the press are declaring THQ to be bankrupt, the company has in fact started Chapter 11 proceedings - a restructuring operaion as part of the US bankruptcy code that allows for a company which has run out of cash to continue operating, safe from going into actual bankruptcy, while investment is found. It's a not-uncommon process: American Airlines is operating under Chapter 11 at present, while film studio MGM filed for its own Chapter 11 proceedings two years ago.
'Rest assured that the goal throughout the sale process has been to preserve our teams and our products. So no matter what the outcome in 30 days, as long as we have accomplished this goal, I will be satisfied,' Rubin added. 'Whatever happens, the teams and products look likely to end up together and in good hands. That means you can still pre-order Metro: Last Light, Company of Heroes 2, and South Park: The Stick of Truth. Our teams are still working on those titles as you read this, and all other rumoured titles, like the fourth Saints Row, the Homefront sequel, and a lot more are also still in the works.
'Finally, you might be asking, why would THQ file for Chapter 11 right before the holiday season? Admittedly, the timing is unfortunate. But as we announced a few weeks ago, we have a January 15 deadline approaching for our bank funding. So if you work backwards to allow the necessary time to complete a sale, you end up at this week. Since all of THQ’s worldwide employees are off for a week and a half of paid vacation starting Friday for the holidays and will return to work on January 2nd, it hardly matters anyway.'
In filing for Chapter 11, THQ has made details of some previously unannounced games public: its court petition, filed in the Delaware District Court, makes reference to a cooperative multiplayer action title in the works from Turtle Rock Studios dubbed Evolve, something called 1666 - the year of the Fire of London, we note - from Assassin's Creed director Patrice Desilets being developed at THQ Montreal, a game titled Crawler from Vigil and another called Atlas from Relic, as well as previously-rumoured titles Saints Row 4 and Homefront 2.
With THQ having driven $5 million in sales from its recent partnership with the Humble Bundle - a move that saw the company's share price jump 40 per cent - it's hoped that its restructuring proceeds smoothly.