THQ could be split up and sold off, judge rules

January 14, 2013 | 11:31

Tags: #bankruptcy #chapter-11 #clearlake-capital-group #darksiders #dawn-of-war #financial #jason-rubin #linux-gaming #metro-2033 #saints-row #stalker

Companies: #humble-bundle #thq

The future of games publisher THQ, responsible for popular franchises including S.T.A.L.K.E.R. (and what a pain that is to type), Metro 2033, Darksiders, Saints Row and Dawn of War, continues to prove uncertain as a judge rules that the company could be broken up into teeny-tiny parts following its filing for Chapter 11 bankruptcy protection.

Things haven't been happy at THQ for some time: despite splashing out on a smooth new logo in 2011, the company has spent the last few years battling ongoing losses interspersed with brief periods of profitability. Back in 2008, THQ was forced to sack 250 staff due to impressive losses, while in 2009 it followed that up with a staggering $430 million loss. Recently, the company has been looking to increase its customer base, partnering with Humble Bundle on the company's first bundle to not include Linux support even as THQ itself promised to investigate Linux support for future releases.

The filing for Chapter 11 bankruptcy protection, announced by president Jason Rubin late last year, was seen as the last straw for the company as it exists today - coming as it did hot on the heels that it would miss the launch dates for the bulk of its upcoming titles including Company of Heroes 2, Metro: Last Light and South Park: The Stick of Truth.

In an attempt to recover, Rubin announced that investment outfit the Clearlake Capital Group had made an offer to purchase the company - but, as part of the Chapter 11 process, in which a company is protected from bankruptcy as it attempts to drum up the cash required to continue operating, other outfits would be given a chance to place a bid for the company.

That part of Chapter 11 proceedings may, a judge has ruled, result in THQ being broken up. Under Chapter 11 regulations, it's possible for investors to bid on sections of a company - for example, only the part of the company responsible for a particular intellectual property - rather than the company as a whole. Should the offers for portions of the company total a higher sum than any single outright offer, the company will be split up - with one investment group getting the rights to the Metro franchise, another the rights to Darksiders, still another to Saints Row and so forth.

It's a chilling prospect for THQ's fans, but one company chair and chief executive Brian Farrel is downplaying - despite a ruling from the US Bankruptcy Court that it would not be able to refuse offers that would see the company broken up. 'Today's ruling provides a clear path. We will now know definitively by January 23rd where we stand,' Farrell claimed in a statement to press. 'We appreciate the support of our employees, partners, and suppliers now more than ever.'

The final bids for THQ will be tallied up by the 22nd of January, following which time the company will discover whether it has been saved by Clearlake Capital Group or doomed to be split up and shared among its rivals.
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