THQ files for bankruptcy

THQ files for bankruptcy
Craig Chapple

By Craig Chapple

December 19th 2012 at 7:09PM

But publisher claims there will be no redundancies as it looks to sell

Embattled publisher THQ has filed for bankruptcy.

The company has entered into an Asset Purchase Agreement with affiliates of Clearlake Capital Group, L.P. to acquire all of the assets of THQ's operating business.

The publisher will sell the majority of its US assets including four studios and its publishing operations.

THQ claims it "does not intend to reduce its workforce as a result of the filing". Currently employees will also receive normal compensation and benefits, pending court approval.

It is expected the publisher will now be delisted from NASDAQ.

In a press release, the company stated the sale would "allow THQ to shed certain legacy obligations and emerge with the strong financial backing of a new owner with substantial experience in software and technology".

THQ has specifically filed voluntary petitions under Chapter 11 of the US Bankruptcy Court of the District of Delaware.

The publisher's foreign operations however, including Canada, are not included in the filings.

The company has also obtained commitments from Wells Fargo and Clearlake for "debtor-in possession" financing of approximately $37.5 million, subject to court approval.

THQ will continue to operate its business "without interruption" during the sale period, and all of it's studios remain open with development also continuing.

In a statement the firm said it "remains confident" in its existing pipeline of games, and it is believed that Clearlake will take on various contracts the publisher has with independent developers.

“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.

“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."

THQ president Jason Rubin added: "We have incredible, creative talent here at THQ. We look forward to partnering with experienced investors for a new start as we will continue to use our intellectual property assets to develop high-quality core games, create new franchise titles, and drive demand through both traditional and digital channels.”

As a stalking bidder however, Clearlake has allowed other potential interested parties to come forward with competing bids.

As it stands, Clearlake's acquisition would cost approximately $60 million.

The company has asked the court for a schedule to complete the sale process in about 30 days.