The video game world changed today as video game developer and publisher THQ Inc, famous for publishing "Saints Row" "Company of Heroes" and World Wrestling Entertainment (WWE) video game franchises, is filing for Chapter 11 bankruptcy protection.
Reuters reported Wednesday that the company had filed in federal bankruptcy court in Delaware.
According to the Los Angeles Times, the video game publisher, which first opened in 1989, entered into an agreement with private investment firm Clearlake Capital Group for a potential deal to sell its assets, including all four of their studios and any games the company has in development.
The once-$2 billion company was worth only $11.3 million on Tuesday, with its shares falling by 74 cents to close out at 36 cents on the Nasdaq on Wednesday.
According to Mike Hickey, an analyst at National Alliance Capital Markets, the announcement was not a surprise, as the company had struggled with delays and underperformance of its products.
"They're currently in default of one of their credit lines, so it's not a huge surprise," he told Reuters.
The company's largest unsecured creditors according to court papers include $102 million in five percent debentures due in 2014, under trustee Wilmington Trust NA; World Wrestling Entertainment Inc., owed $45 million; Yuke's Co. (4334), owed $17.8 million; Mattel Inc. (MAT), owed $12.8 million; and Viacom International Inc., owed $10 million.
With the sale of the assets, it is likely that THQ's popular video game brands such as "Saints Row," "Metro: Last Light," and Relic Entertainment, which produces Company of Heroes and Dawn of War franchises, could be sold to EA Games, Activision and Microsoft, if the aforementioned companies express interest in acquiring them.
WWE provided a statement stating they're "following the developments of THQ's bankruptcy filing today and proposed sale under Bankruptcy Code Section 363. The Company anticipates actively participating within this proceeding."
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