Atari SA's U.S.-based arcade and video game creator filed for bankruptcy protection in New York. The novel consumer electronics company seeks to part ways with their French holding company and look into receiving independent funding.
New York-based Atari, Inc. and other affiliates like Atari Interactive, Inc., Humongous Inc. and California U.S. Holdings Inc., requested to be added to the filing in U.S. Bankruptcy Court. The companies said in a statement that they would sell their assets under free and clear terms in accordance with U.S. bankruptcy laws or restructure to achieve the same outcome.
"Within the next 90 to 120 days, the companies expect to effectuate a sale of all, or substantially all, of their assets," according to the statement.
The 1972 classic video game company is falling behind interactive entertainment superstars like Activision Blizzard Inc. and Electronic Arts Inc., according to Bloomberg Businessweek. Atari still holds onto more than 200 brands like "Missile Command," "Centipede," and "Rollercoaster Tycoon." Some games are even available online and accessible for play through mobile devices.
Atari owes $10 million to $50 million to at least anywhere from 200 to 999 creditors and their reported assets total $1 million to $10 million, Bloomberg Newsweek reports. The French parent company to Atari's U.S.-based operation hasn't shown a profit since 1999 and a "significant loss" is projected for 2012-2013, fueling the U.S.-based Atari operation to sever ties.
"The Chapter 11 process constitutes the most strategic option for Atari's U.S. operations, as they look to preserve their inherent value and unlock revenue potential unrealized while under the control of Atari SA," the company's statement said. "During this period, the company expects to conduct its normal business operations."
The parent company released a statement in response, explaining that they were pursuing associated assistance under French laws.
(Source: Bloomberg Businessweek)
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