The video game publisher THQ has filed for protection from creditor under Chapter 11 of the U.S. bankruptcy code.
The company said it has signed an agreement to sell all of the assets of THQ’s operating business to the investment firm Clearlake Capital Group for $60 million. The company said the sale will “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 said it has commitments from Clearake and Wells Fargo for $37.5 million of debtor-in possession (DIP) financing.
The company said it will continue to operate without interruption during the sale period. THQ said all of its studios remain open.
THQ said that Clearlake has agreed to serve as the “stalking horse bidder” for a sale process, which allows other interested parties to come forward with competing bids. Clearlake’s bid includes a $10 million note for the benefit of the company’s creditors. THQ said it is asking the court to complete the sale process in about 30 days.
The company said there are no plans to cut staff as a result of the Chapter 11 filing, and it said “consumers and retailers should see no changes while the company completes a sale.”
THQ said it expects to receive a delisting notice from Nasdaq. While it is possible that the company could receive higher bids, given that THQ has about $150 million in liabilities, it is highly unlikely that shareholders will receive any proceeds from the sale of the company – in short, the stock is now basically worth nothing.T