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Creditors, Trustee object to THQ sale conditions
Back when THQ filed for Chapter 11 bankruptcy last month, the plan was for the developer/publisher would be sold to Clearlake Capital Group in one big chunk within 30 days, preventing the need for layoffs and avoiding the need to split THQ's various franchises up and sell them a la carte. While this plan sounds like a best-case scenario for THQ given the circumstances, other parties involved in the process have doubts, and have subsequently filed official objections.There's a lot of complicated legal stuff going on, but the situation essentially breaks down like this: US Trustee Roberta DeAngelis has filed an objection over the sale's time table, saying that the 30-day window is far too small to give parties other than Clearlake Capital Group a chance to bid and participate in the sale. She also took issue with a stipulation in THQ's plan that awards $2.25 million to Clearlake in the event that a different company wins the bid; that amount is disproportionately large with respect to the cash value of the purchase price, she claims.A consortium of THQ's creditors have also filed an objection, claiming that THQ's proposed bidding procedures "appear to have been designed specifically to thwart any potential bidders from stepping forward to compete with Clearlake's bid," taking issue with the sale's time table and "requirement that prospective purchasers bid on the Debtors 'as a whole' rather than on a 'piecemeal' or 'title-by-title' basis."In essence, the creditors feel as though the process has been designed to keep THQ operational, rather than to pay back its debts: "Rather than being designed to maximize the value of the Debtors' estates, the Bidding Procedures, by design or otherwise, render the 'auction process' meaningless and virtually guarantee that Clearlake will be the ultimate buyer, thereby ensuring that the Debtors' management retain their positions within, and operating control over, the Debtors' organization."A hearing is scheduled for tomorrow, during which we're confident at least two lawyers will make more money than we'll ever see in our entire lives. They'll probably also talk about this stuff.
Kodak gets court approval to borrow $950 million, end theater sponsorship
Kodak took another step along the road to recovery yesterday, after receiving court approval to borrow $950 million in restructuring funds. Nearly a month after the camera maker filed for Chapter 11 bankruptcy, US Bankruptcy Judge Allen Gropper granted Kodak's request on Thursday, allowing the company to continue operations during its ongoing transition. Gropper's decision, handed down in a Manhattan court, follows a series of negotiations between Kodak and its lenders, and adds an extra $300 million to the $650 million awarded during January's Chapter 11 filing. The company is also allowed to end its sponsorship of the Kodak Theatre in Los Angeles, after successfully arguing that doing so would be in the best interest of Kodak and its creditors. Under the deal, Kodak is obliged to pay $72 million over the course of 20 years. It currently shells out $3.6 million per year and still has $38 million in outstanding payments, but Kodak's lawyers argued that the agreement was too costly. Kodak Chairman and CEO Antonio Perez issued the following statement in response to yesterday's decision: "Today's agreement is another step towards ensuring that Kodak is positioned to execute on the goals the Company set out last month: Bolster our liquidity in the U.S. and abroad, monetize our non-strategic intellectual property, fairly resolve legacy liabilities, and enable Kodak to focus on its most valuable business lines."
Midway owes millions to Epic, NBA, Warner Bros and many more
GamePolitics went digging through Midway's Chapter 11 bankruptcy records and found the company has $281 million in liabilities, with only $167 million in assets. The real eye opener, however, is the list of Midway's top 30 creditors. Just a small sampling: Wells Fargo Bank - $150,000,000 National Amusements, Inc. - $20,147,864 (Which most recently paid the manufacturing costs of Midway's holiday lineup.) NBA Properties, Inc. - $17,294,849 (Licensing and royalty fees) Warner Bros. Interactive - $6,654,203 Epic Games - $1,975,000 (Licensing and royalty fees -- perhaps for for Unreal Tournament?) The list goes on, check out the full roll at GamePolitics. Although there's a lot to snicker about in the full list, nothing really beats the $300,000 in severance pay to former CEO David Zucker -- the man who helped run the company into the ground. Then again, a lot of execs got rich at Midway while the company fell apart.
