THQ files for bankruptcy ahead of investment
THQ has filed for Chapter 11 bankruptcy, but it isn't quite bankrupt; it has actually secured an investor and it's "business as usual".
THQ has filed for Chapter 11 bankruptcy, but it isn't quite bankrupt; it has actually secured an investor and it's "business as usual".
This is a little complicated, and we're not financial journalists, so please bear with us. THQ has filed voluntary Chapter 11 proceedings — filed for bankruptcy — as part of a buyout by the Clearwater Capital Group.
The move is all part of what's called a "stalking horse bid", which is when an investor makes a bid on a beleaguered company and its assets — it essentially sets a "minimum bid" for the company.
In this case, it's the first step for Clearwater to provide US$37.5 million of what's called "debtor-in-possession" financing for THQ.
More importantly, it's business as usual for THQ, with all studios remaining open and all development teams still working.
In the press release announcing the move by Clearwater, Brian Farrell, chairman and CEO of THQ, said:
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.
Even better for THQ employees, the company has no intention "to reduce its workforce as a result of the filing" and production schedules, employee pay and all day-to-day running will continue as normal.