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THQ Investors Call Shenanigans

THQ's recently announced one-two punch of declaring Chapter 11 bankruptcy while arranging a sale to a "stalking horse bidder" for a Section 363 sale has hit a snag, as Gamasutra reports investors have raised objections to the plan. The complaint focuses on how this seems to protect THQ management jobs, but not their investments. The investors aren't the only ones with raised eyebrows over this, as Distressed Debt Investing notes the U.S. Trustee overseeing the THQ bankruptcy has also filed an objection to the proceedings, noting problems with the accelerated timing of asset sales and excessive fee/expense reimbursements.

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7. Re: THQ Investors Call Shenanigans Jan 4, 2013, 11:06 Beamer
 
Tipsy McStagger wrote on Jan 4, 2013, 10:54:
Wow, This really, really sucks. I have loved and purchased most THQ games. I especially loved Space Marine and Dawn of War series. To learn that management probably sank this company into the abyss and then tried to fleece it for even more is down right infuriating.

Where the hell am I going to get my Warhammer 40k fix now?

First off, make sure you read it and judge for yourself.
Second off, remember that this is coming from a bunch of rich white guys. They're every bit as self-interested, if not more so, than management.

One argument it makes is that the sale is designed to keep THQ together. While this saves management jobs, it also saves employee jobs. It keeps the studios and IP together. This shareholder group is arguing there would likely be more value in selling them separately. Know what happens when they're sold separately? EA buys the IP and the studios get liquidated.

Don't feel bad, or necessarily side with, these shareholders. Even if their points are valid they're ultimately pissed that they may only make a few million instead of several million because this deal is designed to keep THQ together and keep jobs for as many people, not just management, as possible.

Jason Rubin tends to be a really, really employee friendly guy. No surprise the deal is structured to get less value for shareholders but keep the individual studios funded and developing (e.g., keep those developer seats full.)
 
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