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Home News THQ Files Chapter 11 Bankruptcy

GAMING NEWS

THQ Files Chapter 11 Bankruptcy

Posted on Wednesday, December 19 @ 11:42:56 Eastern by Keri_Honea


THQ announced today that they have entered into an Asset Purchase Agreement with affiliates of Clearlake Capital Group, LP to acquire virtually all of THQ's assets of its operating business, including THQ's four development studios (Relic, Volition, Blue Tongue Entertainment, and Juice Games) and games in development. With this acquisition, THQ can "shed" specific legacy obiligations and rise anew with strong financial backing.

As a result of this agreement, THQ has filed for Chapter 11 bankruptcy, which essentially calls for a restructuring of a business, not closing the business down. The bankruptcy includes THQ's US businesses, but none of its foreign operations, including its businesses in Canada.

What does this mean for THQ's daily operations? THQ plans to continue running as scheduled with no interruptions during this transition. All of the company's game studios will stay open, and all teams are to continue working on their games. THQ even hopes that their contracts with independent studios will continue as Clearlake plans to assume these contracts as well.

“The sale and filing are necessary next steps to complete THQ’s transformation and position the company for the future, as we remain confident in our existing pipeline of games, the strength of our studios and THQ’s deep bench of talent,” said Brian Farrell, Chairman and CEO of THQ. “We are grateful to our outstanding team of employees, partners and suppliers who have worked with us through this transition. We are pleased to have attracted a strong financial partner for our business, and we hope to complete the sale swiftly to make the process as seamless as possible.”

Jason Rubin,the rather recent president of THQ, said, “We have incredible, creative talent here at THQ. We look forward to partnering with experienced investors for a new start as we will continue to use our intellectual property assets to develop high-quality core games, create new franchise titles, and drive demand through both traditional and digital channels.”

THQ sounds very optimistic in their press release, and their plan appears to be positive and the right way to go. Hopefully it will work out for everyone involved, including all of THQ's and their studios' employees.
Tags:   THQ


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Comments
  • Jobin_Wendy
    Jobin_Wendy
    Joined: Mar 2012
    Posted: Dec 19th, 2012 at 11:52 am
    I worked for Blockbuster when they filed for Chapter 11, and all the managers in my district were pumped about it. A year later, one store was still active, the rest shut down. Chapter 11 doesn't necessarily spell death, but it doesn't necessarily spell a lengthy life afterward, either. Unless someone sees something very special in THQ or is certain they can turn THQ's luck around through a smart business plan, this is only going to prolong the inevitable.
    0 1
  • quiknkold
    quiknkold
    Joined: May 2011
    Posted: Dec 19th, 2012 at 11:53 am
    I dont think this will effect their 2 biggest cash cows.

    The WWE Games are THQ's pride and joy, and they would rather go out of business then lose those rights. Too much good money, just not enough to keep the company going. which leads too.

    South Park : Stick of Truth is one of the top wanted games of 2013. Its almost a guarantee that this will be a giant hit from what we've seen. they would be remise to abandon this.

    How this will effect their last big cash cow, Saints Row, is beyond me. But the other 2 are guaranteed
    0 1
  • Jobin_Wendy
    Jobin_Wendy
    Joined: Mar 2012
    Posted: Dec 19th, 2012 at 12:10 pm
    If they don't have the money to publish, it won't matter. It takes a lot of money to develop and publish a major title, and just because fans want it doesn't guarantee sales. Stretching too thin is what got THQ in trouble in the first place. If they want to recover, they're going to have to sell some rights and focus on only a couple key titles.
    0 1
  • danielrbischoff
    danielrbischoff
    Joined: Nov 2009
    Posted: Dec 19th, 2012 at 12:04 pm
    Yeesh, well we'll have to keep watching. I have high hopes for THQ and some of the projects they have coming up, but who knows how this'll go.
    0 1
  • Stickyellowsock
    Stickyellowsock
    Joined: Oct 2009
    Posted: Dec 19th, 2012 at 12:58 pm
    just give me that south park game
    0 2
  • TurinAlexander
    TurinAlexander
    Joined: Sep 2006
    Posted: Dec 19th, 2012 at 3:10 pm
    Seriously, no love for Darksiders? Darksiders II is one of the best games I played this year. The story was a little weak, but the level design, artwork, and game play were all superb. I really hope that this sale doesn't mean the end of the series.
    0 2
  • ShadeTail
    ShadeTail
    Joined: Nov 2006
    Posted: Dec 19th, 2012 at 4:32 pm
    As long as this Clearlake Capital Group outfit is a smart investor, this could be OK. My understanding of this kind of thing is that they won't own THQ outright, and that THQ's properties are more like collateral for a loan, rather than items that have been purchased. This gives THQ the opportunity to reorganize and work at becoming profitable again, whereupon they will repay Clearlake's investment and become independent again.

    Of course, that's the best case scenario, and it might not work out. We'll just have to wait and see. But it still bodes well for their titles to continue, and that includes Darksiders.
    0 1
  • oblivion437
    oblivion437
    Joined: Nov 2006
    Posted: Dec 20th, 2012 at 12:02 pm
    Any game already in full production is likely to see release. South Park, for instance, is close enough to completion that it is unlikely they would cancel it. Games that are still in the early design and planning stages may be in trouble, but that would be something to examine going forward. Clearlake isn't in a position to take control of such properties or developers as reside outside the US (Relic is a Canadian studio and cannot be offered up as collateral and Dawn of War III is likely to see completion anyhow - Relic seems to have a pretty happy working relationship with Games Workshop, which is rare)
    0 0
  • Lien
    Lien
    Joined: Feb 2008
    Posted: Dec 19th, 2012 at 3:28 pm
    Awwww but they just gave me Metro 2033 for free... wait...
    0 0
  • elmoreoocyte
    elmoreoocyte
    Joined: Apr 2012
    Posted: Dec 19th, 2012 at 4:00 pm
    Hopefully this is a phoenix story. I have fond memories of THQ's past.
    0 1
  • sliverstorm
    sliverstorm
    Joined: Jun 2007
    Posted: Dec 19th, 2012 at 4:50 pm
    It's pretty clear that they're going to continue operating, but if I were a shareholder I would be PISSED right now. All their equity in a company with assets still worth likely at least $100M is wiped out because Brian Farrell and the CFO who quit a month ago couldn't manage cash flow.

    What's REALLY funny is that right around 2007-2008, Brian Farrell switched his bonus compensation from primarily stock to primarily cash, keeping his total compensation in the multiple millions despite a tanking stock price, until he eventually halved his salary to try and save face. If he doesn't get fired as part of the Chapter 11 reorg, I just don't know what to say.
    0 1
  • Andy578
    Andy578
    Joined: May 2011
    Posted: Dec 19th, 2012 at 9:47 pm
    just give me Homeworld 3 already
    0 0
  • oblivion437
    oblivion437
    Joined: Nov 2006
    Posted: Dec 20th, 2012 at 6:07 pm
    As it happens THQ does own the rights. Unfortunately they have held the rights since sometime in 2007 so if they were going to fund development of it they would likely have done it by now.
    0 0
  • Lok-Nar
    Lok-Nar
    Joined: Feb 2012
    Posted: Dec 20th, 2012 at 2:26 am
    I want Saints Row 4 and DarkSiders 3 & 4. If they stopped making collectors editions that might help them save revenue.
    0 0
  • Nick_Tan
    Nick_Tan
    Joined: Jul 2006
    Posted: Dec 20th, 2012 at 1:08 pm
    I might just have to buy two copies of South Park then.
    0 0

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