South Park Studios battles THQ over potential sale of The Stick of Truth
On January 18, South Park Digital Studios filed a preliminary objection to THQ's proposed sale of South Park: The Stick of Truth. THQ and South Park Studios entered into a Deal Memo, granting THQ use of certain South Park trademarks and copyrights, on June 29, 2011. THQ filed for Chapter 11 bankruptcy on December 19 and is being auctioned off today, January 22, at 3 p.m. EST.
In an objection filed in Delaware bankruptcy court, South Park Studios claims that the Deal Memo does not allow other parties use of the South Park IP, and even if the game does end up at a different company, THQ owes South Park Studios at least $2.275 million. South Park Studios "also reserves the right to exercise its option to acquire from THQ all elements of the games and related products under the Deal Memo."
THQ filed a reply on January 21, requesting that the court overrule the objection and allow the sale to continue, though it says it is working toward a consensual resolution with South Park Studios. THQ argues that the license is exclusive and therefore transferable as THQ sees fit. As for the $2.275 million, THQ is "evaluating the amount that South Park asserts is owing" and plans to work with South Park Studios to resolve the issue.
All bids in the THQ bankruptcy sale were due by 9 a.m. EST today and the auction begins at 3 p.m. Hearing on the sale takes place tomorrow, January 23, at 9:30 a.m., with the closing on January 24. THQ will only sell assets individually if it receives bids of more than $60 million (plus a $10 million note) that Clearlake Capital Group is offering for the entire company. The auction has attracted the attention of EA, Warner Bros., Double Fine and others.
