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Blockbuster UK bankrupt again, can't honor next-gen pre-orders
Blockbuster UK is entering administration again, this time under investment company Gordon Brothers Europe. This means Xbox One and PS4 pre-orders through Blockbuster UK will not be fulfilled, the company says in a tweet. Blockbuster UK advises those who pre-ordered a next-gen system in-store to visit that location for help, and those who ordered online to write (a real-life letter) to BLOCKBUSTER, Harefield Place, The Drive Uxbridge UB10 8AQ. Blockbuster UK entered administration in January and was purchased by Gordon Brothers Europe in March, saving a reported 2,000 jobs and keeping open 264 stores. Gordon Brothers Europe attempted to restructure Blockbuster UK and develop a digital platform, but Blockbuster's US parent company wouldn't allow it, the company told BBC in a statement. The remaining 264 stores will remain in business while Gordon Brothers Europe seeks a buyer, though this move gets rid of 32 jobs at Blockbuster UK headquarters, the site says.
38 Studios loan under SEC investigation
It seems as though we can't go more than a few weeks without hearing about some new complication related to the collapse of 38 Studios and the financial catastrophe it left in its wake. This week's news comes in the form of an SEC probe into the $75 million in loan guarantees offered to the studio by the Rhode Island Economic Development Corporation. The RIEDC has secured the services of a law firm to help it handle the SEC's investigation. Further details are sparse, as the RIEDC has offered only that it "doesn't discuss ongoing matters related to 38 Studios and maintains a level of confidentiality as requested by the SEC." Strangely, the SEC investigation, which launched in early 2012, was not mentioned to investors when Rhode Island published financial documents related to a bond transaction in April of that year. According to the treasurer's spokesperson, the state's treasury was not aware of the probe at that time. The RIEDC is currently involved in a lawsuit against studio head Curt Schilling and former RIEDC members responsible for the 38 Studios deal.
Kodak exits bankruptcy with new focus on business imaging
After a year and a half of trials and tribulations, Kodak is finally in the clear -- it just exited Chapter 11 bankruptcy. Now that the company has finished offloading its document and personal imaging groups, it's free to pursue a recently court-approved reorganization plan that focuses solely on business products like movie film and packaging. The resulting firm is a far cry from the camera giant that we once knew, but we may hear about its work in the future. Kodak promises more details of "what's next," and it tells the AP that it's working on technology like printable touchscreen layers and smart packaging.
Atlus parent company selling operations, publishing plans are 'unaffected'
Atlus parent company Index is preparing to sell off its subsidiary operations after recently filing for Japan's equivalent of bankruptcy protection, Bloomberg reports. Atlus USA's day-to-day operations are, for the moment, unaffected by Index's financial woes, so those of you looking forward to Dragon's Crown or Etrian Odyssey Untold can breathe easy. "Our games are still shipping on time," Atlus PR manager John Hardin said. "Dragon's Crown will be releasing as intended on August 6." The report, translated by Mad Man's Cafe, notes that bids for Index's assets will start as soon as next week. Industry analysts expect settlements to reach a total of 15 billion yen ($149.9 million). Index will be delisted from the Japanese stock market on July 28, and operation sales will wrap up in September.
THQ receives approval to liquidate
Never forget that Death was THQ's final protagonist. Late yesterday, the US bankruptcy court in Delaware approved the liquidation of Toy Head Quarters (THQ). Unless you're a creditor seeking some kind of back-pay or compensation, this is likely the last you'll hear about THQ. As Bloomberg reports, from here on out it's a scramble for whatever cash exists from the multiple intellectual property and asset auctions the company went through. Depending on what happens during several hearings scheduled over the next three months, creditors could receive 20 percent to 52 percent of what they are owed. The percentages noted could be on an even wider sliding scale based on other factors the lawyers and accountants are sure to enter an octagon over. The current estimate on claims is between $143 million to $184 million. RIP, THQ.
Rhode Island set to pay 38 Studios bonds. Probably.
38 Studios collapsed upon itself in a heap of flaming disaster last year, and Rhode Island taxpayers ended up stuck with the bill. The state used a $75 million loan, acquired through the sale of taxable bonds, to convince 38 to operate within its borders, and RI is now on the hook for around $89 million after the studio declared bankruptcy. Some state lawmakers in Rhode Island flirted with the idea of "walking away" from the debt, which is apparently a privilege afforded to a government and not its citizens. However, the state's House Finance Committee has approved a budget that includes, at the very least, making an interest payment of $2.5 million on the debt in May 2014. If Rhode Island is running off the plan it talked about last month, this first payment will be followed by yearly payments of $12.5 million until the debt is repaid. The budget hasn't passed; it still needs to get through the state's House and Senate. Future interest payments will also have to be approved by the state legislature.
EV outfit Better Place calls it quits, set to undergo liquidation
Better Place's plan for electric cars with swappable batteries is coming to an end. Despite a change in leadership and a streamlining effort over the past six months, the Israeli EV maker has filed a court motion for liquidation, citing insufficient cash to continue operations and a failure to raise the necessary funds. According to Israel Corporation, the firm's controlling shareholder, other investors willing to pitch in the vast amount of money needed couldn't be found. With approximately $812 million lost in operations and deploying battery exchange stations since 2007, and $454 million of that within 2012 alone, it's estimated that just recouping those loses would take $500 million and four years. "Unfortunately, after a year's commercial operation, it was clear to us that despite many satisfied customers, the wider public take up would not be sufficient and that the support from the car producers was not forthcoming," said Better Place CEO Dan Cohen. Sure, it might be curtains for the company, but the existing battery network looks like it might live on, as the liquidator is being asked to "maintain the functioning of the network." [Thanks, Michael]
Atari Inc. seeks to generate $22M by auctioning assets in July
Atari Inc., the US branch of French parent company Atari S.A., filed for court approval this week to auction its assets in July. Those assets include the Atari logo, as well as the Test Drive, Rollercoaster Tycoon, Asteroids, and Pong franchises among others. As Reuters and the Wall Street Journal reports, Atari Inc., which filed for bankruptcy earlier this year in a bid to sell its assets and separate itself from Atari S.A., has failed to secure a "stalking horse" or lead bidder since then. Atari Inc. approached more than 180 parties about purchasing assets, but only 15 came back with preliminary bids. Atari Inc. didn't deem a single bid acceptable to set the minimum price for the division's clearout. As it is, Atari Inc.'s own listed minimum bids for the July auction total "nearly $22.2 million." They include $15 million for the Atari brand, $3.5 million for the Rollercoaster Tycoon franchise, $1.5 million for Test Drive, and RTS franchise Total Annihilation at just $250,000. Atari Inc. has already secured $5 million through debtor-in-possession financing. While the auction is still pending court approval, Atari Inc aims to hold it between July 16 and July 19. While the Atari name is synonymous with the arcade's pioneering years, Atari Inc. traces its roots to a company called GT Interactive, founded in 1993. GT Interactive was eventually acquired by French company Infogrames Entertainment, and in 2001 Infogrames seized Atari Corporation and its Atari properties through the purchase of Hasbro Interactive. In 2009, Infrogrames renamed itself as Atari S.A., with what was GT Interactive by then renamed as Atari Inc. After some forty or so years that have seen the Atari brand transfer across several entities, if things go to plan then in two months time it'll find itself at a new home once more. What the ramifications of that sale would be for Atari S.A., financially and nominally, are unclear. In a financial statement published on May 15, Atari S.A. said, "Faced with the uncertainties relating to the proceedings that are underway in the US, where the Group's strategic assets and most of its business are located, the outcome of the Chapter 11 proceedings in the US will be decisive for all the stakeholders." The statement also reveals Atari S.A. recently sold the ownership of its Outcast franchise for a "nominal amount," and negotiations are underway at similar prices for its Desperados and Silver franchises.
Report: Timegate closes its doors
Timegate, the studio behind Section 8 and Aliens: Colonial Marines, laid off its entire staff today, Kotaku reports. On May 2, Timegate filed for bankruptcy protection, citing a debt of up to $50 million. The filing revealed that Timegate owed large sums to 50 companies, including Epic Games, Agora Games and DJ2 Entertainment. In April, Timegate lost an appeal against publisher SouthPeak Interactive, potentially losing the Section 8 license and adding $7.35 million to its debt. SouthPeak fought for Timegate's closure in arbitration and won, leading to today's layoffs, the report says. Timegate let go 25 employees in March, citing a rough transition to next-gen consoles and a publishing deal that fell through. The studio's most recent project is Minimum, a free-to-play shooter for PC that was supposed to launch on Steam Early Access on April 16. Minimum is currently not listed anywhere on Steam.
Colonial Marines co-dev TimeGate files for bankruptcy protection
Section 8 developer and Aliens: Colonial Marines co-developer TimeGate Studios has filed for bankruptcy protection in the Texas Southern Bankruptcy Court, revealing that it owes its creditors between $10 million and $50 million in debt. Court documents note that TimeGate seeks protection from creditors while it reexamines its finances, Polygon reports. Currently, the company owes large, unspecified amounts to partners such as Epic Games, Agora Games and DJ2 Entertainment. The petition names nearly 50 creditors in all. TimeGate recently lost an appeal in its long-running legal battle with publisher SouthPeak Interactive, potentially owing $7.35 million in damages and losing its rights to the Section 8 intellectual property. Aliens: Colonial Marines, which TimeGate developed in partnership with Gearbox Software, is the subject of an ongoing class action lawsuit. TimeGate's current project, the minimalist free-to-play shooter Minimum, was announced in April.
Coda files for bankruptcy, hopes to sell its EV assets for $25 million
We can't say we were enthused with Coda Automotive's ho-hum EV design, and we know the public wasn't, either. Still, it's hard not to lament the company's fate now that its parent, Coda Holdings, is declaring Chapter 11 bankruptcy and getting out of the car market. The firm has had enough of production delays and slow adoption, and now it's planning to sell its Automotive division through an auction that should net at least $25 million. What's left of Coda will focus on energy storage, if and when it emerges from bankruptcy -- not nearly as exciting a field, but likely more profitable. While the exit was far from unexpected, it reminds us that the modern EV business is more often defined by its casualties than its winners.
Kodak expects to exit bankruptcy in Q3 2013
Now with a patent sale, new financing and asset offloads under its belt, Kodak's homing in on when it might emerge from Chapter 11 bankruptcy. In January, the imaging giant predicted it might finally exit its financial default by mid-2013, and now it's filed paperwork with a New York court indicating it's on track to meet that goal sometime during its third quarter this year. In addition to the timeline update, the Plan of Reorganization and Disclosure Statement outlines how the firm's debts have been settled and its future plans, which place heavy emphasis on its commercial imaging business. A hearing for the document and associated strategy is anticipated to be scheduled in mid-June, and creditors will arrange a vote afterwards to decide if everything's to their liking. Kodak's certainly not out of the woods just yet, but it's plodding steadily towards the clearing. [Image credit: Viktor Nagornyy, Flickr]
Apple taking ownership of patents acquired from Kodak
Last year, a group of 12 licensees bid on 1,100 digital photography patents that were being sold by Kodak as part of bankruptcy proceedings. Although the venerable photography company was hopeful that the sale would be enough to help it restructure, the portfolio sold for only US$525 million to the licensees. Those patents are now being transferred from Kodak to licensees including Apple, with the Cupertino company taking ownership of four patents in the last week. The patents being transferred include US Patent Nos. 8,432,479, which deals with range measurement using a zoom camera; 8,432,472, titled "Camera for displaying digital images"; 8,432,456 for a "Digital camera for sharing digital images"; and 8,432,461 for a "Wireless camera with automatic wake-up and transfer capability and transfer status display." In each case, Apple is listed as the assignee of the patent in question. Other companies that will receive patents as part of the sale include Google, Microsoft, Facebook, Samsung, Adobe, Amazon, LG and HTC. Each company receives rights to Kodak's digital imaging patents and other intellectual property, although Kodak also retains rights to use those patents in any future business or subsidiary. Kodak may be edging closer to emerging from bankruptcy; on Monday, the company announced that it will be spinning off the document and personal imaging units to its British pension plan for $650 million.
Kodak tentatively sells its scanning business to Brother for $210 million
Kodak as we once knew it has been shedding its identity piece by piece, and today it's selling off key elements of a more familiar cornerstone. The one-time photography legend has made an initial deal to offload assets of its Document Imaging division to Brother for $210 million through a stalking horse bid. If no one else makes a sweeter offer, Brother is likely to take partial control of Kodak's scanning hardware and software in an agreement that's expected to receive bankruptcy court approval by June. It's almost the end of an era for a company that's all too familiar with ending eras -- let's just hope it gets around to starting one of them in the near future.
Rhode Island attempting to default on 38 Studios' debt
The AP is reporting that Rhode Island is attempting to default on the debt it owes for 38 Studios' $75 million loan and subsequent bankruptcy. The state has a proposal before lawmakers that would keep it from having to make any payments to bond holders. Supporters of the move to default say that the insurance company will compensate bond holders, while the EDC, which approved the loan, says that defaulting will hurt future project and bond ratings. One lawmaker and default proponent, Rep. Charlene Lima, said that the 38 Studios fiasco harmed the reputation of the state and constricted its future economic development. The proposal is being opposed by Governor Lincoln Chafee, who wants to see the debt repaid.
Curt Schilling asks judge to dismiss 38 Studios fraud lawsuit
Let's assume for a moment that you're Curt Schilling, formerly of the Red Sox and formerly of the now-defunct 38 Studios. You're facing a massive lawsuit for fraud regarding a $75 million loan from the state of Rhode Island. What do you do? It appears that Mr. Schilling's first approach is to ask the judge on the case to throw out the case entirely, claiming that the basis of the case is itself fraudulent. The crux of the lawsuit is the state's claim that Schilling and the 38 Studios board of directors willfully obfuscated the company's status from state lawmakers. Schilling has put forth that 38 Studios fully disclosed its status to the state investors on numerous occasion, providing them with an accurate picture of the company's financial situation. Due to this disclosure the allegations of fraud and obfuscation are simply not possible, hence the request for dismissal. Schilling goes on to claim that the entire suit is politically motivated and that the company's failure is chiefly due to Governor Lincoln Chafee not doing enough to save 38 Studios from bankruptcy.
Darksiders, Homeworld, Red Faction and other IPs next on THQ auction
THQ has announced that it will be auctioning off the intellectual property rights for a large portion of its back catalogue, including Darksiders, Red Faction and Homeworld. The full list of properties up for sale, broken into six lots and posted in full after the break, also includes games like Destroy All Humans! and numerous licensed products.Once interested bidders have gone through the proper channels, initial bids must be submitted by April 1, 2013, with final bids due on April 15. Once all bids have been submitted, THQ will talk the situation over with the various entities it owes money to and will then designate a primary and back-up bid for each lot. Once all that has been completed, the sales will be presented to the court for final approval, expected to take place in May.
Atari US secures $2 million in financing, prepares to sell assets
After declaring bankruptcy last month, the US branch of Atari has closed $2 million in debtor-in-possession financing. Another $3 million is expected once the credit documents are filed and subsequently approved by the court. The company will use the funds to finance its current operations while "evaluating its strategic options" for restructuring.Pending court approval, Atari has also hired Perella Weinberg Partners, an independent advisory and asset management firm, to help evaluate said options. Part of that responsibility will be to aid in the sale of Atari's assets, which include everything from Pong to the company's logo. Anyone want to go halfsies on Combat?
Court approves THQ asset sales
The U.S. Bankruptcy Court has approved the sale of THQ's assets to Ubisoft, Sega, and other companies, THQ announced this morning. The sales are all expected to close today. THQ totals the proceeds from the sale at $72 million, making a total of $100 million when added to the company's estimate of its remaining assets.In a statement issued by THQ (sure to be one of the last), CEO Brian Farrell said "While we had hoped that the restructuring process would allow the company to remain intact, I am heartened that the majority of our studios and games will continue under new ownership."New president Jason Rubin echoed the sentiment. "I was brought in eight months ago to help turn this ship around," Rubin said, "and while I'm disappointed that we could not effect a sale for the entire operating business, I am pleased that the new buyers will be providing jobs to many of our very talented personnel. When we first announced the sale process, I said I would be happy if the company's games and people had a bright future, even if it meant I did not have a job at the end of it. And I still feel that way."
Court approves Kodak financing, could exit bankruptcy by mid-2013
When Kodak filed for Chapter 11 bankruptcy a year ago, the company promised to re-emerge stronger than ever a year later. While that scenario has yet to play out, the gears do seem to be turning: US bankruptcy court Judge Allan Gropper today approved Kodak's bid to borrow up to $844 million from Centerbridge Partners LP. That approval's still conditional, mind you, on the completion of Kodak's recent digital imaging patent fire sale (at "no less than $500 million"). Should that all pan out, the company plans to emerge from bankruptcy by "mid-2013," no doubt worse for wear but better than a few years back.
