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

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Avatar image for alex
Posted by alex (3481 posts) -
For a brief bit of levity, here is the first image that popped up when I Google image searched
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?

Staff Online
Avatar image for alex
#1 Posted by alex (3481 posts) -
For a brief bit of levity, here is the first image that popped up when I Google image searched
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 Online
Avatar image for thineoarlock
#2 Edited by ThineOarlock (48 posts) -

Dang

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

Avatar image for sil3n7
#3 Posted by Sil3n7 (1435 posts) -

Kickstarter for Saints row 4

Avatar image for theironweasel
#4 Posted by TheIronWeasel (30 posts) -

What of Warhammer 40k!? WHAAAAATTTT!?!

Avatar image for recroulette
#5 Edited by recroulette (5447 posts) -

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

Avatar image for xmegadethxsly
#6 Edited by xMEGADETHxSLY (484 posts) -

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

Avatar image for duh_ave
#7 Posted by Duh_ave (101 posts) -

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

Avatar image for themangalist
#8 Posted by themangalist (1869 posts) -

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.

Avatar image for noremnants
#9 Posted by NoRemnants (432 posts) -

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.

Avatar image for ronniebarzel
#10 Posted by RonnieBarzel (371 posts) -

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.

Avatar image for uberexplodey
#11 Posted by UberExplodey (999 posts) -

Live goddamn you, liiiiiive

Avatar image for j12088
#12 Posted by J12088 (471 posts) -

Never heard of clearlake.

Avatar image for mister_v
#13 Posted by Mister_V (2305 posts) -

I want to dig deeper into horses dammit.

Avatar image for winternet
#14 Posted by Winternet (8397 posts) -

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

Avatar image for grok1122
#15 Posted by Grok1122 (12 posts) -

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.

Avatar image for urictheoddball
#16 Posted by UricTheOddball (90 posts) -

@Sil3n7 said:

Kickstarter for Saints row 4

Only if they are bringing back Johnny Gat.

Avatar image for calitar
#17 Posted by Calitar (113 posts) -

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.

Avatar image for phrosnite
#18 Posted by phrosnite (3519 posts) -

Relic and 40k <3

Avatar image for warley
#19 Posted by warley (47 posts) -

Fifth!

Avatar image for itspizza
#20 Posted by itspizza (474 posts) -

This is good? I guess?

Avatar image for daniel_newton
#21 Posted by Daniel_Newton (1274 posts) -
Avatar image for mjhealy
#22 Posted by MjHealy (1999 posts) -

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.

Avatar image for kittyvondoom
#23 Posted by KittyVonDoom (447 posts) -

*throws money at Volition*

Avatar image for muralbat
#24 Posted by muralbat (157 posts) -

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.

Avatar image for maitimo
#25 Posted by Maitimo (210 posts) -

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

Avatar image for bacongames
#26 Posted by bacongames (3979 posts) -

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.

Avatar image for deaddorf
#27 Posted by DeadDorf (419 posts) -

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

Avatar image for icecreamjones
#28 Posted by Icecreamjones (428 posts) -

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.

Avatar image for alternate
#29 Posted by alternate (2819 posts) -

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

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

Avatar image for themasterds
#30 Posted by TheMasterDS (2912 posts) -

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

Avatar image for nelsonfalker
#31 Posted by nelsonfalker (31 posts) -

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.

Avatar image for werupenstein
#32 Posted by Kidavenger (4168 posts) -
Avatar image for forkboy
#33 Edited by forkboy (1584 posts) -

@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.

Avatar image for jjnen
#34 Posted by jjnen (680 posts) -

Happy fucking christmas!

Avatar image for rachelepithet
#35 Posted by rachelepithet (1646 posts) -

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.

Avatar image for icecreamjones
#36 Posted by Icecreamjones (428 posts) -

@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.

Avatar image for mnzy
#37 Posted by mnzy (3044 posts) -

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

Avatar image for sgtsphynx
#38 Posted by SgtSphynx (2420 posts) -

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

Avatar image for ddensel
#39 Posted by ddensel (421 posts) -
Avatar image for cannonballbam
#40 Posted by cannonballBAM (712 posts) -

The list of american publishers is dwindling.

Avatar image for year199x
#41 Posted by year199X (79 posts) -

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

Avatar image for renegadesaint
#42 Posted by RenegadeSaint (1640 posts) -

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

Avatar image for csl316
#43 Posted by csl316 (13928 posts) -

Just gimme Red Faction: Guerilla 2 somehow.

Avatar image for christoffer
#44 Posted by Christoffer (2325 posts) -

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

No Caption Provided

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

Avatar image for tankintheair315
#45 Posted by tankintheair315 (392 posts) -

Live damn you Live!

Avatar image for theodacourt
#46 Posted by theodacourt (590 posts) -

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

Avatar image for pixeldemon
#47 Posted by Pixeldemon (251 posts) -

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

Avatar image for crusader8463
#48 Edited by crusader8463 (14757 posts) -

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.

Avatar image for wyld
#49 Posted by Wyld (322 posts) -

I DECLARE BANKRUPTCY!

Avatar image for triumvir
#50 Posted by Triumvir (615 posts) -

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

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