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THQ will sell whole unless exceeded by individual asset bids
THQ acknowledging the details of yesterday's reported bankruptcy proceedings this morning, confirming its assets will only be purchased a la carte if individual offers exceed a whole buyout."Today's ruling provides a clear path. We will now know definitively by January 23 where we stand," stated THQ CEO Brian Farrell. "We appreciate the support of our employees, partners, and suppliers now more than ever."As things stand now, we know that private equity firm Clearlake Capital Group has offered "$60 million, including a new $10 million note for the benefit of the company's creditors." What this means is that anybody offering more for the whole of the company can take THQ from the cushy speed agreement made between THQ executives and Clearlake.There's also the very real possibility that Electronic Arts, along with Warner Bros and other bidders, could collaboratively purchase THQ's intellectual property (Saints Row, Darksiders) and studios (Volition, Relic, Vigil). If those bids exceed Clearlake's total (and Saints Row is definitely getting any player most of the way there), that's it for THQ.Bids are due January 22, 2013, by 9AM Eastern. The auction will be held at 3PM. Hearing on the sale will be held at 9:30AM the following day, followed by the closing on January 24.
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.
