THQ’s Quick Sale is Slowed Down by Judge

thq judge

Beleaguered game publisher THQ’s attempt to be quickly sold to Clearlake Capital for $60 million has been halted by a judge in response to creditors’ complaints from last week. They said that the sale’s quick turnaround wouldn’t give adequate time for other potential buyers to make offers on portions of the company, says an article on Business Week.

Lawyers for Warner Bros. were present at the hearing, at which point it was revealed that WB Interactive is “interested in evaluating THQ’s assets if the sale process is extended.” And in recent months, Ubisoft’s CEO Yves Guillemot has expressed interest in acquiring some of THQ’s properties. Now that the quick sale to Clearlake has been put on hold, both companies—and more—will have an opportunity to explore possible partial or total purchases.

In addition, THQ sought approval for a $37.5 million bankruptcy loan to help the company keep operating until the sale had gone through. However, because THQ’s cash flow exceeded its projections, it will still be able to keep operating through the bankruptcy process.

It’s unclear at this point just what will happen in the next few weeks. But due to this latest ruling, it seems likely (to me at least) that THQ’s assets and IPs may get snapped up by separate companies. We may see Saint’s Row end up at Ubisoft, with Metro going to WB Interactive…all speculation, of course. But since the brakes have been put on the $60 million sale to Clearlake, I wouldn’t be surprised if these other companies manage to come up with the cash to take what they want from THQ.

Business Week via Joystiq

  1. THQ will be missed, from publishing such classics as Jimmy Neutron: Attack of the Twonkies, Hello Kitty: Happy Party Pals, and, who could forget, Bratz: Rock Angelz.

  2. Its amazing how stuff works in the corporate world. This was an oddly quick stop to the purchase of thq as a whole. this seems oddly preferential to WB and Ubisoft, I dont rly understand why the courts think it has the right to intervene or slow down a sale. If the sale was unlawful it would never go through anyway

    • That’s actually an interesting thought, why would anyone stop a sale that would potentially pay up the investors, even if not fully. As far as I understand, if you purchase property you also purchase any debt that property has, instead choosing to divide it’s assets, meaning eventually the debt itself will the only thing no one will buy.

      Bonkers if you ask me.

      • Bankruptcy means that debt is “restructured,” and often reduced. So many creditors wind up getting the shaft no matter what happens. However, it’s my understanding that the debt is portioned out based on what can be gotten from the assets still held by the company. The issue here was that THQ wasn’t looking to satisfy their creditors, but rather make a quick sale so they could only have $60 million in capital to pay back. After that happened, the debts would be “satisfied” in the eyes of the law, and THQ would move on in new hands.

        However, in this case, the creditors saw what was happening, saw that there was interest from OTHER publishers with big checkbooks who have publicly or privately said that they’re interested in the company’s assets (WB Interactive and Ubisoft, for instance), and made a stink about it.

        The judge putting the breaks on the quick sale is, in many ways, bad for the folks in charge at THQ because their future at one, solid company is not assured. But it’s better for the people who are owed money, because now they might get their debt repaid closer to what they’re owed. It’s also great for the people who want to buy THQ’s assets piece by piece for a lower price than they would’ve been able to without the bankruptcy filing.

        That’s why the sale was stopped.

      • Hmm, I see, thanks for clarifying that, But it still sounds strange on theory, because if the whole company would go for 60 millions, anyone else that buy in parts gonna haggle for it.

        Say WB buys Vigil for 10 million, Ubi buys Volition for 20 million and a third party buys Relic for another 10 million, say no one has any interest on the rest of THQ assets, you just lost 20 million for no reason.

        While I have no idea whatsoever what the real numbers these companies are willing to invest, still sounds weird to divide its assets.

        But according to my bank manager I don’t understand how money works anyway.

      • That’s kind of the point–the companies may be willing to buy the bits and pieces they want for higher prices than they’d be going for if part of a package deal for $60 million to Clearlake.

      • Never actually read the definition of that word. I feel so bad for THQ

  3. You know, if Ubisoft were so interested in some of THQ’s IPs why didn’t THQ “rent out” some of them for cash?

    • THQ can’t even afford to “rent out” their devs. They have to sell like a madman. Though, I don’t think this is anything to be afraid of. They seem to have some idea of what’s lies ahead.

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