THQ in Default on Credit Line

A THQ SEC Filing (Adobe Acrobat format) reveals more fiscal bad news for the publisher, following a a recent collapse of its stock. The filing reveals THQ is in default on a line of credit from Wells Fargo, leading to a delayed 10-Q filing, and a situation that sounds tenuous at best: "The Company is currently in discussions with Wells Fargo regarding the asserted defaults and believes that it will reach an agreement with Wells Fargo with respect to such defaults. Wells Fargo has continued to fund requests from the Company after September 30, 2012 while Wells Fargo and the Company attempt to reach an agreement. There can be no assurance, however, that the Company will achieve an agreement with Wells Fargo." Thanks nin via Kotaku/Polygon.
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Re: THQ in Defaults on Credit Line
Nov 11, 2012, 16:15
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Re: THQ in Defaults on Credit Line Nov 11, 2012, 16:15
Nov 11, 2012, 16:15
 
killer_roach wrote on Nov 11, 2012, 15:12:
Your argument only holds water in the situation where THQ had a clearly outlined path back to profitability, which they don't. This default isn't a temporary setback - it's a symptom of further underlying issues. Without even a current accounts surplus on the horizon (much less an overall profit), it's only a matter of time before the sharks start to circle (if they haven't already).

Interesting. I wasn't aware I had made an argument. Not that I don't get accused of that every time I (or anybody else) posts here...

Actually, what I stated was that they are effectively one step away from bankruptcy. Everybody involved (THQ, Wells Fargo) are well aware of that - as I said, it did not come as a surprise. Therefore my statement that companies default all the time only suggests that news of such a default is absolutely meaningless with regard to whether or not they are going bankrupt, rather it is the particular company's circumstances that give the honest appraisal. Everybody is making the best of a bad situation by stringing it out, and if you want me to fall back to my original post's analogy, like the Byzantine Empire at the end.
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