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Monday, Sep 25, 2023

THQ Aims Its Sights on Quick Chapter 11 Exit

Video game publisher THQ Inc. filed for bankruptcy last week but could quickly itself under new ownership. Santa Monica private equity firm Clearlake Capital Group LP has made an offer of $60 million for THQ’s assets, though other interested parties may come forward with competing bids, the company stated in a Dec. 19 release. The sale comes as the Agoura Hills company — best known for its game franchises “Saints Row” and “Company of Heroes” – filed for voluntary bankruptcy protection. In its filing in U.S. Bankruptcy Court in Delaware, the company reported assets of $205 million and debts of $248 million. THQ is seeking court approval of the sale within 30 days. The disclosure caps a year that THQ stockholders would like to forget. In January, the company exited the licensed children’s console game business, and in February announced layoffs of up to 240 employees. As financial troubles mounted, THQ made other changes to its game mix, named a new president and chief strategy officer, and reverse split its stock to prevent delisting from the Nasdaq. The bankruptcy filing and sale of assets are necessary steps to position THQ for the future, said Chief Executive Brian Farrell. “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,” Farrell said in a statement. In a posting at the company website, President Jason Rubin said the bankruptcy filing does not mean the end of the company. Game developers continue to work on 2013 releases, including “Company of Heroes 2” and “South Park: The Stick of Truth,” Rubin said. “When the purchase is complete, Clearlake has committed to invest additional ample capital to let us finish the games we are making and continue making games going forward,” Rubin wrote. THQ will not make staffing cuts and the 462 full-time employees will continue to receive paychecks, pending approval of the bankruptcy court, the company said in a statement. Clearlake Capital invests in industry sectors that include technology, communications, media and consumer products. The firm has invested $3 billion since its founding in 2006. THQ’s stock price plummeted following the announcement of the bankruptcy filing. Shares closed at 36 cents on Dec. 19 after having closed at $1.38 the previous day for a loss of $1.02 or 74 percent. THQ expects to receive notification this month that its shares will be delisted from the Nasdaq.

Mark Madler
Mark Madler
Mark R. Madler covers aviation & aerospace, manufacturing, technology, automotive & transportation, media & entertainment and the Antelope Valley. He joined the company in February 2006. Madler previously worked as a reporter for the Burbank Leader. Before that, he was a reporter for the City News Bureau of Chicago and several daily newspapers in the suburban Chicago area. He has a bachelor’s of science degree in journalism from the University of Illinois, Urbana-Champaign.

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