THQ Selling off Properties, Filing for Bankruptcy Protection
THQ's found a seller and filed for bankruptcy protection.
Despite THQ's best efforts to sort out its financial troubles over the past year, the company has finally come to the decision to sell off its "operating business, including THQ's four owned studios and games in development" to a "stalking horse" bidder—essentially the initial bidder on a bankrupt company's—that's an affiliate of investment firm Clearlake Capital Group.
THQ's also filed for Chapter 11 bankruptcy for itself and its studios under U.S. Code. Unlike Chapter 7 bankruptcy—the typical type of bankruptcy that comes to mind when thinking of troubled companies where companies sell off all assets, cease to function, and give proceeds to their creditors—Chapter 11 bankruptcy allows the company to continue its operations to attempt to restructure the business. In this case, THQ's filed for bankruptcy protection in preparation for the sale, which is expected to be completed in 30 days.
"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 THQ CEO Brian Farrell in its investor news release. "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."
The news release also states that "THQ does not intend to reduce its workforce as a result of the filing, and employees will continue to work their usual schedules and receive normal compensation and benefits, pending customary Court approval," so there hopefully won't be any more sad notices of layoffs that we've become so accustomed to over the year.
As per the Chapter 11 filing, THQ's stock will be delisted from NASDAQ. That's already clearly evident from THQ's dismal stock price, which tanked to $.36 (at the time of this article) at the announcement of the sale.