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THQ Simultaneously Files Chapter 11 Bankruptcy, Secures Buyer for Company's Assets [UPDATED]

A "stalking horse bidder" has taken over the financially strapped publisher, and all of its currently owned studios. Jason Rubin comments on the bankruptcy process.

For a brief bit of levity, here is the first image that popped up when I Google image searched "stalking horse."

UPDATE: THQ's Jason Rubin has posted a lengthy note explaining the process of Chapter 11 bankruptcy, while simultaneously attempting to assuage any fears fans might have about the fate of the publisher's upcoming lineup. He specifically makes a point of comparison to MGM. MGM famously ran into financial issues a couple of years back, and Chapter 11 bankruptcy turned out to be the production studio's savior, allowing it to fund two of this year's biggest films in the James Bond sequel Skyfall, and Peter Jackson's first Hobbit film. Of course, it also allowed MGM to release that abhorrent Red Dawn remake, AKA the movie most directly comparable to a franchise in THQ's lineup, but I suppose that wasn't really Rubin's point.

You can read his entire post here.

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THQ is bankrupt, and has a new owner. Yes, all at the same time.

Clearlake Capital Group LLP has acquired the financially beleaguered publisher as a "stalking horse bidder," offering up a total consideration of $60 million for the company, including a new $10 million note for its creditors.

The bankruptcy petition by THQ is simply a byproduct of this larger deal, allowing the company to shed some of its debt obligations in the wake of the sale.

According to a press release put out by THQ today announcing the deal, the company made it clear that it has every intention of continuing development on its upcoming suite of games, including the likes of Metro: Last Light and South Park: The Stick of Truth.

"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."

In case you're anything like I was prior to writing this story and don't really understand what a "stalking horse bidder" even is, it turns out it's simply a method of auctioning assets that ensures THQ wouldn't be low-balled by potential bidders. By filing for Chapter 11 bankruptcy, THQ was able to use the stalking horse method to select Clearlake as an opening bidder for the publisher. Any other company could have entered the fray and bid up over Clearlake, but it sounds like nobody did. In effect, THQ chose its eventual owner, while leaving the door open for other bidders who never appeared.

Kind of an interesting story to just float out there right at the end of the year, when all the media is beginning to disappear for vacation, ain't it?

Alex Navarro on Google+
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Posted by Alex
For a brief bit of levity, here is the first image that popped up when I Google image searched "stalking horse."

UPDATE: THQ's Jason Rubin has posted a lengthy note explaining the process of Chapter 11 bankruptcy, while simultaneously attempting to assuage any fears fans might have about the fate of the publisher's upcoming lineup. He specifically makes a point of comparison to MGM. MGM famously ran into financial issues a couple of years back, and Chapter 11 bankruptcy turned out to be the production studio's savior, allowing it to fund two of this year's biggest films in the James Bond sequel Skyfall, and Peter Jackson's first Hobbit film. Of course, it also allowed MGM to release that abhorrent Red Dawn remake, AKA the movie most directly comparable to a franchise in THQ's lineup, but I suppose that wasn't really Rubin's point.

You can read his entire post here.

--------

THQ is bankrupt, and has a new owner. Yes, all at the same time.

Clearlake Capital Group LLP has acquired the financially beleaguered publisher as a "stalking horse bidder," offering up a total consideration of $60 million for the company, including a new $10 million note for its creditors.

The bankruptcy petition by THQ is simply a byproduct of this larger deal, allowing the company to shed some of its debt obligations in the wake of the sale.

According to a press release put out by THQ today announcing the deal, the company made it clear that it has every intention of continuing development on its upcoming suite of games, including the likes of Metro: Last Light and South Park: The Stick of Truth.

"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."

In case you're anything like I was prior to writing this story and don't really understand what a "stalking horse bidder" even is, it turns out it's simply a method of auctioning assets that ensures THQ wouldn't be low-balled by potential bidders. By filing for Chapter 11 bankruptcy, THQ was able to use the stalking horse method to select Clearlake as an opening bidder for the publisher. Any other company could have entered the fray and bid up over Clearlake, but it sounds like nobody did. In effect, THQ chose its eventual owner, while leaving the door open for other bidders who never appeared.

Kind of an interesting story to just float out there right at the end of the year, when all the media is beginning to disappear for vacation, ain't it?

Staff
Edited by ThineOarlock

Dang

EDIT: Shit, I stole the quest. MY BAD.

Posted by Sil3n7

Kickstarter for Saints row 4

Posted by TheIronWeasel

What of Warhammer 40k!? WHAAAAATTTT!?!

Edited by RecSpec

Edit: Damn I should read these things all the way through, 60 million for everything? Are you kidding me!?

Edited by xMEGADETHxSLY

Someone buy Saints Row (Microsoft) ?????

Posted by Duh_ave

Never a good story, hope there aren't TOO many layoffs.

Posted by themangalist

I'm glad it's over with. Just a change in the mysterious boardroom directors, doesn't matter to us gamers really, as long as the THQ name lives on and Saints Row 4 still in development.

Posted by NoRemnants

Doesn't seem too bad. They had a buyer and are using Bankruptcy to write off some of their debt. I assume this was their plan all along.

Posted by RonnieBarzel

With a new owner, will this mean Jason Rubin will be leaving the company? I'm not an economics major, but it would make sense to me that a new owner would want to install its own people.

Posted by UberExplodey

Live goddamn you, liiiiiive

Posted by J12088

Never heard of clearlake.

Posted by Mister_V

I want to dig deeper into horses dammit.

Posted by Winternet

Well, I can't say I'm surprised. It's a bummer.

Posted by Grok1122

Stalking horse bid is when the company going bankrupt chooses an interested buyer to be the 'opening bid' for it's assets in a bankruptcy proceeding.

Posted by UricTheOddball

@Sil3n7 said:

Kickstarter for Saints row 4

Only if they are bringing back Johnny Gat.

Posted by Calitar

I feel like this is probably the best possible outcome for THQ. They were well past the point of making a comeback on their own. Here's hoping the future is bright for them.

Posted by phrosnite

Relic and 40k <3

Posted by warley

Fifth!

Posted by itspizza

This is good? I guess?

Posted by Daniel_Newton
Posted by MjHealy

I got pretty worried by that headline but this kind of seems like decent news. It should hopefully consolidate THQ's position going to into 2013. Just make to to Saints Row The Fourth is all I can say.

Posted by KittyVonDoom

*throws money at Volition*

Posted by muralbat

As sad as this is, I wonder if this will shake up the WWE franchise a bit, could see a bidding war for that title in the future.

Posted by Maitimo

Is it weird that this happened earlier than I expected? I thought they'd make it to South Park first.

Posted by BaconGames

Better than "total debt catastrophe, rabid bid war ensues over THQ properties, get yours today!" I'm really thinking about the dev's being allowed to keep working and it seems like that's the case so good on them.

Online
Posted by DeadDorf

Someone call Studio Protective Services and take Relic away from that publisher!

Posted by zeekthegeek

People on this site REALLY need reading comprehension. THQ is still open. They just have new owners. Vigil, Volition, Relic are still all open for business and working on their games.

Posted by alternate

Day 1 : Don't worry, everything will stay the same.

Day 2 : Just a "few" layoffs to improve profitability.

Posted by TheMasterDS

Last night I dreamt about this. Crazy. In my dream I wondered who was next.

Posted by nelsonfalker

Hopefully everything works out with this. In the last couple years THQ has gone from being a punchline to a publisher that I actually look forward to seeing what they release.

Posted by Kidavenger
Edited by forkboy

@Kidavenger said:

The bankruptcy filing says that it doesn't include foreign operations; what happens to THQ Montreal and Relic Entertainment? they are both Canadian.

Presumably they are still owned by the parent company THQ though. You'd expect them to still be among the assets bought by this stalking horse when they picked up THQ, unless you read something that disagrees.

Posted by jjnen

Happy fucking christmas!

Posted by rachelepithet

I don't understand what this means. Headlines make it sound like THQ sold the rights to its franchises, like Saints Row, WWE, and South Park, to another publisher. Meaning THQ no longer owns those properties. Meaning they're EA's, or Ubi's, or cancelled. Headlines make it sound like THQ had to do for all its games what it did with the UFC license.

Posted by zeekthegeek

@boocreepyfootdoctor said:

I don't understand what this means. Headlines make it sound like THQ sold the rights to its franchises, like Saints Row, WWE, and South Park, to another publisher. Meaning THQ no longer owns those properties. Meaning they're EA's, or Ubi's, or cancelled. Headlines make it sound like THQ had to do for all its games what it did with the UFC license.

No, a company bought THQ. That's all that happened. THQ is still running. Rubin is still in charge. All the studios are still open and all those games expected to come out are still coming.

Posted by mnzy

I hope it really is like they say and it's not that bad.

Posted by SgtSphynx

Sad news to hear, but we kinda knew it was coming.

Posted by ddensel
Posted by cannonballBAM

The list of american publishers is dwindling.

Posted by year199X

This is a real bummer. I hope things turn around for them.

Posted by RenegadeSaint

I had to get a restraining order to solve my stalking horse problem.

Posted by csl316

Just gimme Red Faction: Guerilla 2 somehow.

Online
Posted by Christoffer

My mind first went to this when I heard "Stalking Horse":

Still, I love THQ and I hope they climb out of this soon.

Posted by tankintheair315

Live damn you Live!

Posted by theodacourt

If this means THQ carry on as usual then I'm all for it. Whoop!

Posted by Pixeldemon

Does this mean I won't be able to buy the Saint's Row IP for $3 at Brian Farrell's garage sale?

Edited by crusader8463

God dam... I really hope Relic ends up in good hands when all this is done. Would hate to see such an amazing developer get lost in all this mess. They are the only company making RTS games of any quality these days, and every time they have gone outside the genre I have loved the games too.

Posted by Wyld

I DECLARE BANKRUPTCY!

Posted by Triumvir

Goddammit. here's hoping Relic and the rest of the studios don't get gutted.

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