bankruptcy
Latest
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.
Report: HMV to be saved as restructurer Hilco acquires debt
Business restructuring company Hilco is set to acquire HMV after reportedly taking control of the struggling British retailer's debt . According to the Financial Times, people familiar with the situation report Hilco took on the debt today, estimated three months ago to be around $279 million. If the reports are accurate, Hilco, already appointed yesterday as advisors to administrators Deloitte, have effective control of the ailing company.HMV went into administration last week after failing to secure $483 million in additional financing against debt, leaving the company in need of a buyer, with around 4350 jobs in the balance. HMV's troubles headline a sorry month for British game retail after Play.com announced the closure of its retail arm, and Blockbuster UK also went bust, with 160 of its stores being closed as it too seeks a buyer.
Atari US files for bankruptcy, selling iconic logo and assets
Atari Inc. filed for chapter 11 (restructuring) bankruptcy this morning, as it aimed to detach itself from Atari SA, its French parent company, and acquire independent business. Atari Inc. said it plans to sell all of its assets in the next 90 to 120 days, including defining franchises such as Pong and Asteroids, and even its iconic logo. The company has already secured, pending approval, $5.25 million in debtor-in-possession investment from funds managed by investment advisory Tenor Capital Management.While Atari boasts a 40 year history, and is tied closely to the pioneering years of the arcade, its name has meant a number of different things across that time thanks to several changes of hands.The US-based company now called Atari. Inc was GT Interactive when it was founded in 1993. GT Interactive then became Infogrames Inc. in 1999 after French company Infogrames Entertainment acquired controlling interest in it. In 2001, Infogrames Entertainment bought Hasbro Interactive, who had acquired Atari Corporation and its Atari properties three years prior. In 2003, Infogrames Inc. became Atari Inc, now with license to use the Atari name and logo, and in 2008 Infogrames Entertainment completely acquired the company. Then, just to confuse everything that one step further, Infogrames Entertainment renamed itself as Atari, SA in 2009.
Atari files for bankruptcy, hopes to survive by selling off Pong and other assets
Atari Inc. has filed for bankruptcy protection, looking to separate from its not-so-profitable French owners and pitch for independent funding. In the process, the elder statesman of gaming has secured $5.25 million of debtor-in-possession financing and will aim to sell assets, including its famous logo (which is already licensed out) and games like Pong, Asteroid and Tempest, in the next 90 to 120 days. In the last few years, Atari Inc. has shifted its focus from traditional retail gaming to digital titles and licensing, with mobile platforms proving especially lucrative for the parent company, Atari SA. The gaming arm is aiming for a return to former glory and, it hopes, the chance to go another 40 years. [Photo Credit: Marc Grimm]
HMV goes bankrupt after 91 years in the disc-selling business
The first time we mentioned HMV on Engadget was back in 2009, when the British retailer discounted the PSP Go -- ironically, one of the earliest devices to do away with disc-shaped media. As the picture above shows though, HMV's history goes back much further than that. Its first store opened in 1921 under an elaborate neon sign featuring the company's emblem of a dog listening to a gramophone beneath the words "His Master's Voice." Fast forward to today and the old-school seller has suffered gravely from the same online shift that has affected many others. It has called in administrators after failing to negotiate new terms over its bank debt, and unless a buyer steps up to take over the chain's 240 stores then as many as 4,350 people will be let go. According to Metro, the many HMV gift vouchers that would have been given and received over Christmas are now effectively "worthless." On the other hand, the British personal finance guru Martin Lewis reckons gift vouchers shouldn't be thrown away as they may be redeemable one day, or there may be a chargeback option if they were purchased with a credit card. [Image credit: London Express / Getty Images]
HMV entering administration [update]
Update: HMV confirmed it's filing notice to appoint Deloitte as administrators to the company. As the BBC reports, HMV is suspending trading on the London Stock Exchange from Tuesday, January 15. HMV's 239 stores across the UK and Republic of Ireland are to remain open while Deloitte seeks a purchaser. If a new buyer isn't found, around 4350 people will lose their jobs.UK retailer HMV will reportedly enter administration (i.e. bankruptcy), after it was unable to obtain £300 million ($483M) in additional financing against debt. The Financial Times and Channel 4 both report the struggling brick and mortar franchise will announce the news tomorrow morning, making it the latest casualty to affect the UK games retail market.Other prominent game retail victims in recent times include Play.com, which will alter its operation by March. Then there's the saga of GAME, which has also struggled and dealt with bankruptcy.GameStop removed itself from the UK retail market in early 2012 to become an "e-commerce only operation."
THQ's individual franchises up for grabs, more show up to bid
THQ's bankruptcy, once expected to be the intimate dinner for two that executives of the bankrupt publisher were hoping for, is turning into a Vegas buffet. Over the weekend, U.S. bankruptcy Judge Mary F. Walrath put the kibosh on THQ's eyebrow-raising quick sale to the private equity firm Clearlake Capital Group, allowing more time for other interested parties to get involved.The Twitter feed for Distressed Debt Investing has been doing courtroom reporting, noting that the judge has set an auction date of January 22 where THQ assets could be sold individually. It's also been reported that Electronic Arts is now among the bidders. Warner Bros. has also been acknowledged as sniffing around, along with several others.EA already got a good deal out of THQ in the middle of last year, leveraging THQ's precarious financial situation and taking the UFC license by offering up an "undisclosed cash payment." Warner Bros. has also shown talent in the bargain-basement bankruptcy shopping experience, grabbing Mortal Kombat during Midway's collapse.Let's not kid ourselves: the fresh shrimp flown in this morning at this THQ buffet is the Saints Row franchise. The latest game has shipped 5 million units and the franchise has sold 11 million units. Both EA and WB's portfolios are missing an established sandbox crime game – and the bonus of having a new Saints Row delivered this year on a platter.
Judge denies THQ's plan for a quick sale as Warner Bros., others show interest
Earlier this week, the various organizations to which THQ owes giant piles of money filed an objection, claiming that the developer/publisher's bankruptcy plan for a quick sale to Clearlake Capital Group was designed to minimize harm to its staff and leadership, rather than maximize its ability to pay back its debt obligations. As is the way with these sorts of things, a hearing was held yesterday to get the situation sorted, during which U.S. bankruptcy judge Mary F. Walrath concluded that THQ's plan does not allow enough time for interested parties other than Clearlake Capital Group to get properly involved in the process. Therefore, the plan is rejected. "I am not convinced that we are under the gun to have a sale process by the 15th," Walrath said during the hearing, according to Business Week. Another hearing has been scheduled for Monday, January 7. "In the meantime I think the parties need to talk."Meanwhile, five companies are in the process of due diligence, Centerview Partners banker Sam Greene testified during the hearing. Warner Bros. lawyer Howard J. Weg was also in attendance, saying that WB would be interested in further exploring THQ's available assets, should the sales period be extended.Buying up franchises from bankrupt developers is nothing new for Warner Bros., and considering how well Mortal Kombat turned out, it may not be a terrible development, should it come to pass. Imagine, for instance, a Saints Row game developed by RockSteady, or a Darksiders fighting game developed by NetherRealm Studios. Worse things have happened.
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.
Unannounced THQ games from Vigil, Turtle Rock, more in bankruptcy filing
THQ's filing for chapter 11 bankruptcy includes a rundown of all of its current projects and lists a few unannounced games from Vigil Games, Turtle Rock, Relic Entertainment and Patrice Desilets, who is at THQ Montreal.Relic Entertainment is developing a project under a working title of "Atlas," set to launch in 2014, as well as Company of Heroes 2, the filing states.Turtle Rock Studios, previously involved in Left 4 Dead 2 and Counter-Strike Source, is developing a co-op, multiplayer action game called Evolve. THQ filed a trademark for Evolve in March.THQ Montreal is working on 1666, another trademark THQ filed in March.Vigil Games, the team behind the Darksiders series, is working on a game called Crawler. No more information about this project is revealed in the filing and this is the first murmur of its existence.THQ game director Jason Rubin tweets that all current projects are on track for their scheduled release dates, including Company of Heroes 2, Metro Last Light and South Park: The Stick of Truth, while Saint's Row and Homefront follow-ups are still a go.
Kodak sells imaging patents to pay down debt
Struggling imaging company Kodak announced today that it sold its digital imaging patents to pay off its debts as it moves through bankruptcy. The US$525 million portfolio was purchased by patent licensing companies Intellectual Ventures and RPX Corporation. Intellectual Ventures will pay a portion of this $525 million figure, while the rest will come from 12 licensees including Apple, Google and RIM. As part of this transaction, Kodak agrees to settle current patent-related litigation involving the participants, including Apple. Kodak and Apple have battled in court over imaging patents, some of which were developed during the time Kodak worked with Apple on the QuickTake 100 digital camera. In the course of the legal proceedings, Kodak sued Apple and Apple countersued Kodak claiming the company misappropriated the digital imaging technology from this collaboration. [Via The Verge]
Google and Apple team up to buy Kodak patents
Google and Apple are more often seen as rivals rather than teammates, but they've joined forces to pool a bid of US$500 million to buy patents from bankrupt Eastman Kodak Co. The companies are planning to buy some of Kodak's 1,100 imaging patents in a bankruptcy auction. Apple was part of a group that purchased more than 6,000 patents from Nortel Networks for $4.5 billion in a similar proceeding last year; Google went alone and lost out on those patents. The patents in question pertain to the "capture, manipulation and sharing of digital images." Apple had previously joined with Microsoft and Intellectual Ventures Management LLC in July to try purchasing some of the patents at auction, while Google joined up with several Android manufacturers and RPX Corp to make an offer. Each group offered less than the $500 million that Kodak is seeking, so the two groups have now teamed up to offer the requested amount. Eastman Kodak wishes to exit bankruptcy in the first half of 2013. The reorganized company will focus on commercial, packaging and functional printing, and enterprise services instead of photography.
A123 Systems becomes America's latest EV battery maker to file for bankruptcy
Having been riddled with setbacks, including a major recall of faulty batteries supplied to Fisker Automotive, Michigan's favorite EV battery maker A123 Systems has filed for bankruptcy. It has also announced the sale of its main business units to rival Johnson Controls in a deal pegged at $125 million -- a sad fraction of the billion dollars it raised since it launched in 2001 (not least from government grants). It seems that neither fresh lithium ion innovations nor a potential deal with Chinese investors were able to keep the company out of the red, which leaves A123 on the road to nowhere -- right behind that other DoE-sponsored hopeful, Ener1.
Kodak dropping out of the consumer inkjet printer business in 2013
More gloomy news from Kodak: the company just announced that it will stop selling consumer inkjet printers in 2013 and instead focus its efforts on commercial printing products. This decision hardly comes as a surprise: Kodak filed for Chapter 11 bankruptcy earlier this year and attempted to auction off a stockpile of patents valued at up to $2.6 billion. The company stated on Friday that it expects to take a $90 million hit due to its floundering inkjet business. Kodak's garage sale attracted interest from unlikely alliances in the form of Apple and Microsoft versus Google and Samsung, but reportedly only reeled in disappointing offers under the $500 million mark. Hoping to rebound next year as a "lean," mean, successful machine, we'll just have to wait and see what develops for this fallen photography frontrunner.
Fallen kingdom: 38 Studios' collapse and the pitfalls of using public money to support tech companies
In a career filled with many clutch throws from the baseball mound, former Boston Red Sox ace Curt Schilling's main calling card was a gutsy post-season performance made even more memorable by a blood-soaked sock. It was a pitch made by Schilling outside of Major League Baseball, however, that would prove to be his most daring one yet. In 2010, Schilling convinced Rhode Island officials to give his video game company, 38 Studios, a $75 million loan guarantee. A self-professed fan of massively multiplayer online role-playing games (MMORPG), Schilling's dream was to create a worthy competitor to Blizzard's MMORPG juggernaut, World of Warcraft. In 2006, Schilling started Green Monster Games, which was later renamed 38 Studios. Luring the company away from Massachusetts was supposed to bring in more than 400 jobs and serve as the linchpin for launching a new tech-based industry in Rhode Island. Instead, the state's taxpayers found themselves left at the table with a multimillion-dollar tab.
OnLive officially announces asset acquisition, notes that its newly formed company will keep OnLive name
Amid the rumors, sourced reports and statements, it was easy to lose track of the facts surrounding OnLive's recent restructuring efforts. No surprise then, that the newly formed outfit has issued a press release and FAQ (after the break) in hopes will clear things up. First and foremost, the firm reiterates that the streaming game service will continue operating uninterrupted, and that the "newly formed company" that acquired the firm's assets will continue to do business under the OnLive name. The announcement also mentions the Assignment for the Benefit of Creditors (ABC) process OnLive used to settle its debts, noting that "an affiliate" of Lauder Partners, a technology investment firm, was the new OnLive's first investor. Finally, the firm laments the necessity of laying off its staff, stating that "neither OnLive, Inc. shares nor OnLive staff could transfer under this type of transaction," confirming that nearly half of the previous staff had been offered positions at the new company, and optimistically projecting future hires culled from both previous and new employees. The new OnLive calls the asset acquisition "a heartbreaking transition for everyone involved," but looks optimistically to a future of "transforming the OnLive vision into reality." Check out OnLive's full, official word on the matter below.
OnLive's alternative to bankruptcy: just what is an Assignment for the Benefit of Creditors?
The news is out. OnLive, Inc. is no more, having cut the bulk of its workforce loose and used an Assignment for the Benefit of Creditors (ABC) to absolve itself of massive debts incurred by the expansion of its services without a corresponding increase in its customer base. But what is this alternative to filing for bankruptcy, and why did OnLive choose this particular legal reset button to start over? We spoke with an expert on the matter, Martin Pichinson, co-founder and managing member of Sherwood Partners (which does two or three ABCs in a given week), to help educate us on this little-known tool used by companies irrevocably in the red.
Source: OnLive undergoing buyout in wake of dire financials, laying off 'at least 50 percent' of staff
After a lot of back and forth from the rumor mill and official OnLive channels, we now have what we believe to be a far clearer view of precisely what is happening right now at OnLive headquarters in Palo Alto. We've spoken with a (now former) employee of the gaming service who ran down today's events for us. According to the account, a meeting was held at OnLive's offices at 10AM this morning, wherein the company's CEO announced a massive staff layoff -- at least 50 percent of the staff, according to our source's numbers. The layoffs come as part of across the board cuts to the company, and all those out of a job will have their key cards deactivated as of 4PM local time today. The source was understandably baffled by the abruptness of the news, along with the added blow that no severance will be offered and stock holdings are essentially worth nothing. The move apparently comes as OnLive is being purchased by an unknown party. Those being kept on have reportedly received offer letters from the new company. Why the sudden move? The source believes it may have something to do with the company's massive operating costs, which we're told are around $5 million a month. Certainly those concerns line up with a story dug up by Kotaku highlighting the company's plans to file for Assignment for the Benefit of Creditors as a result of the company's troubled financial situation. We're still gathering information as to the nature of the buyout. Update: According to our source, the writing wasn't on the wall at the company per se, but OnLive had reportedly been entertaining acquisition offers ahead of the news from companies including HP. Update 2: Our source has offered up some additional information on the matter, putting the average concurrent user number for the service at 1,100 to 1,500, peaking at around 1,800 on a given day -- not exceptional by any means in the face of reported $5 million a month operating costs. The number of layoffs, meanwhile, may well be greater than originally suggested, with our source putting the number of employees staying on board at around 10 to 20 percent.
The Game Archaeologist: Neocron and Neocron 2
It's the distant future. The high-tech battle armor you wear sharply contrasts with the ruins of civilization that you traverse. You spot an enemy and raise your pulse rifle, firing off shots as you strafe to cover. Technology hasn't solved the issue of war; it's just made it that much more bloody. PlanetSide 2? Nope -- this is Neocron, the quite-forgettable MMOFPS from the way-back era. I like to call it "that game with the most regrettable cover art in the history of video games," but that isn't quite as snappy. Going into this article, I have to admit that I previously knew absolutely nothing about Neocron other than the fact that it was a sci-fi MMO that vaguely reminded me of Anarchy Online. Oh, also the fact that nobody I know or perhaps ever will know played it. Is it just a myth? A practical joke to make us believe in a MMO phantom? Only sifting through layers of dust and grime would produce results, so I rolled up my sleeves and started digging.
Judge rules against Apple in Kodak patent dispute, cites disruption to next week's auction
Is this Kodak's moment? It's sure shaping up to be, as Bloomberg reports the once prominent imaging company has just earned a slight, though significant courtroom victory against Apple. At stake is the ownership of ten patents related to digital imaging, two of which have been deemed incontestable by a Manhattan bankruptcy judge due to Cupertino's late stage ownership filing. Citing potential disruptions to next Wednesday's auction, Judge Gropper ruled against Apple's claims, while also striking down Kodak's request for a summary judgment on the eight remaining IPs and leaving the door open for further dispute. So, though it may seem like the Rochester-based company is finally out of the woods, this certainly isn't the end of its woes -- Apple has now filed counterclaims and is seeking a transfer of the case to district court. And if the House that Steve built's legal track record is any indication, it's not going down without an interminable fight.
