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THQ Files for Chapter 11; Plans Sale

THQ has filed for Chapter 11 bankruptcy as part of the process of selling its operations to an investor called the Clearlake Capital Group (thanks Joao via Gamasutra). The THQ Website explains this involves securing interim funding to continue the company's day-to-day operations and the plan for Clearlake to "serve as the 'stalking horse bidder' for a Section 363 sale process, which allows other interested parties to come forward with competing bids." Here's more:

The company is asking the Court for a schedule to complete the sale process in about 30 days.

Consumers and retailers should see no changes while the company completes a sale. The new financing will support business operations throughout the period. THQ does not intend to reduce its workforce as a result of the filing, and employees will continue to work their usual schedules and receive normal compensation and benefits, pending customary Court approval.

As is the case after a Chapter 11 filing, THQ expects to receive notice from NASDAQ informing the company that its shares will be delisted from the exchange within nine calendar days of notification.

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38 Replies. 2 pages. Viewing page 1.
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38. Re: More Big Picture Details Dec 21, 2012, 04:05 InBlack
 
Another case of VIP execs ruining the company that puts bread on their table. THQ is one of the relatively few publishers that own some really cool developers and even better IPs and what do they with them??? Nothing...

Bad management is what this is any way you look at it...
 
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I have a nifty blue line!
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37. Re: More Big Picture Details Dec 19, 2012, 20:27 HorrorScope
 
Beamer wrote on Dec 19, 2012, 15:47:
Creston wrote on Dec 19, 2012, 15:33:
Can someone explain what's entailed in a Section 363 sale process?

Is there any chance of them continuing the way they have been, at all? I'd hate to see Saints Row go under...

Creston

A separate entity buys the rights to auction the company, in essence. THQ is somewhere along the lines of an $8 million dollar company. The rights to auction it were purchased for $60 million, so clearly people think it has value. If no one bids $60 million Clearwater gets THQ. If anyone bids more Clearwater gets a commission on that. That $60 million includes $10 million to debtors, but otherwise it's a sale of assets and not debts.

THQs goal is to still exist. Their stock is going to be delisted, but they fully expect to still exist. They're looking for someone larger to purchase them and keep them going. THQ has zero value to anyone not looking to do a video game company, so they'd stick around in some form. If you're in the home office, you should fear for your job. If you're in Volition you should fear what happens if a sale takes too long and cash runs out, but otherwise you have a future.

But what will ultimately happen if this is successful is that someone will own THQs value but not most of their debt (some of their purchase goes to that debt.) This leaves THQs only overhead being things like salaries and occupancy. They're mostly a healthy company like that, which is why they're doing this, but they saw no way to get out on their own.

Yes, this also works as yet another corporate welfare method. Where filling for bankruptcy personally has become more difficult. For example filing, then creditors still coming after you does exist now today for individuals. The Corporate world seems to have more freedoms. I've seen this "we'll go bankrupt" tactic and have the same owners on the other side still have the same business but minus the huge debt. I can't say this is certainly what is going on here, sort of sounds that way. But I know a few businesses in my area that have done pretty much this. It is seemingly a viable working business strategy.
 
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36. Re: THQ Files for Chapter 11; Plans Sale Dec 19, 2012, 19:38 cronik
 
Cutter wrote on Dec 19, 2012, 15:31:
Yes, but the only important issue is what's going to become of the Saints Row IP?

Hopefully it dies.
 
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35. Re: THQ Files for Chapter 11; Plans Sale Dec 19, 2012, 19:18 Slashman
 
Dev wrote on Dec 19, 2012, 19:13:
Beamer wrote on Dec 19, 2012, 16:31:
Do the execs want to get paid for doing a good job here? Yes. Yes they do. But they're not dumb enough to take money out of the coffers when they're struggling to stay alive at a time that they know that being bought out will mean even more money for them.
And yet, thats pretty much exactly what the Caen bros did with Interplay's corpse. Essentially, they got more in bonuses than fallout online got in dev funds during the years they pretended to do something with it, so they wouldn't forfeit the IP to beth per the contract. I checked Interplay's financial statements for those years, and that was pretty obvious.

If they had instead used all that money to do actual substantial development, they might have had a leg to stand on and keep the MMO IP, and perhaps even get it released and made money off of it.

Now I doubt anything like that will happen with THQ, but my point is, greed can be very stupid and outweigh any logical thought.

Dude...he totally needed that third Ferrari!!
 
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34. Re: THQ Files for Chapter 11; Plans Sale Dec 19, 2012, 19:13 Dev
 
Beamer wrote on Dec 19, 2012, 16:31:
Do the execs want to get paid for doing a good job here? Yes. Yes they do. But they're not dumb enough to take money out of the coffers when they're struggling to stay alive at a time that they know that being bought out will mean even more money for them.
And yet, thats pretty much exactly what the Caen bros did with Interplay's corpse. Essentially, they got more in bonuses than fallout online got in dev funds during the years they pretended to do something with it, so they wouldn't forfeit the IP to beth per the contract. I checked Interplay's financial statements for those years, and that was pretty obvious.

If they had instead used all that money to do actual substantial development, they might have had a leg to stand on and keep the MMO IP, and perhaps even get it released and made money off of it.

Now I doubt anything like that will happen with THQ, but my point is, greed can be very stupid and outweigh any logical thought.
 
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33. Re: THQ Files for Chapter 11; Plans Sale Dec 19, 2012, 18:16 nin
 
Jivaro wrote on Dec 19, 2012, 18:06:
Rhino wrote on Dec 19, 2012, 17:23:
Slashman wrote on Dec 19, 2012, 17:19:
zombiefan wrote on Dec 19, 2012, 17:09:
WOOHOO!!! Champagne for everyone! Kiss my ass, THQ.

(passes around cigars)

Huh? Headscratch

zombiefan pretty much pulls this in every thread about THQ. They apparently touched him in his special area or made him eat his own dog or some other such thing.

*clicks through post history*

Wow...Zombiefan, what did THQ do to you?


Seriously. It's a little weird...

 
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32. Re: THQ Files for Chapter 11; Plans Sale Dec 19, 2012, 18:11 xXBatmanXx
 
FREE KEYS FOR EVERYONE! hehehehe  
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Buy from GreenManGaming? Use this, we both get $2.00 - http://www.greenmangaming.com/?gmgr=purutuwi
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31. Re: THQ Files for Chapter 11; Plans Sale Dec 19, 2012, 18:06 SlimRam
 
I'm not really sure if I can handle the thought of no more Saint's Row games... *eye starts to twitch as I stare blankly at the news on my screen and fart aloud* Drool  
Avatar 57335
 
I went to the 'Water and Ice' store near my house and I asked to see they're 'Secret Menu'.
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30. Re: THQ Files for Chapter 11; Plans Sale Dec 19, 2012, 18:06 Jivaro
 
Rhino wrote on Dec 19, 2012, 17:23:
Slashman wrote on Dec 19, 2012, 17:19:
zombiefan wrote on Dec 19, 2012, 17:09:
WOOHOO!!! Champagne for everyone! Kiss my ass, THQ.

(passes around cigars)

Huh? Headscratch

zombiefan pretty much pulls this in every thread about THQ. They apparently touched him in his special area or made him eat his own dog or some other such thing.

*clicks through post history*

Wow...Zombiefan, what did THQ do to you?
 
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29. Re: THQ Files for Chapter 11; Plans Sale Dec 19, 2012, 18:05 Flatline
 
Rigs wrote on Dec 19, 2012, 16:10:
RollinThundr wrote on Dec 19, 2012, 16:04:
Rigs wrote on Dec 19, 2012, 15:52:
So...umm, where'd all that bundle money go?

Plus, if they were to give Volition permission to go ahead with Freespace3, they'd be rollin' in it in no time! (Yes, I live in a fantasy world, doesn't everyone?)



=-Rigs-=

The smoldering ashes of Interplay still retain the rights to Descent and Descent Freespace.

BLASTED! Foiled again!


=-Rigs-=

Volition could easily create a new IP for a space sim game. Freespace was about as generic as it got in terms of actual setting. The gameplay, writing, and everything else made it a classic.

I still miss dodging C-Beams on a capital ship bombing run.
 
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28. Re: THQ Files for Chapter 11; Plans Sale Dec 19, 2012, 18:02 DangerDog
 
Pretty obvious with that fire sale of just about every viable PC game in their library included with that humble bundle.

Doesn't look too good for unreleased games, I would bet a lot of that money goes towards a couple of golden parachutes at the top.
 
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27. Re: THQ Files for Chapter 11; Plans Sale Dec 19, 2012, 17:48 Prez
 
This is awful (but not unexpected) news. Despite the inevitable missteps and boneheaded moves a company the size of THQ is bound to make - way way WAY fewer than EA and Microsoft though - , THQ has put out some great games and owns some great properties that they in my opinion have consistently done justice to.

I hope against hope that this isn't the end for THQ, but it sure looks to be just that.
 
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26. Re: THQ Files for Chapter 11; Plans Sale Dec 19, 2012, 17:23 Kajetan
 
Beamer wrote on Dec 19, 2012, 16:31:
Stop being paranoid.
I'm not paranoid. I'm just asking what THQ did with the money from the last Humble Bundle. Do you know that?
 
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25. Re: THQ Files for Chapter 11; Plans Sale Dec 19, 2012, 17:23 Rhino
 
Slashman wrote on Dec 19, 2012, 17:19:
zombiefan wrote on Dec 19, 2012, 17:09:
WOOHOO!!! Champagne for everyone! Kiss my ass, THQ.

(passes around cigars)

Huh? Headscratch

zombiefan pretty much pulls this in every thread about THQ. They apparently touched him in his special area or made him eat his own dog or some other such thing.
 
Reply Quote Edit Delete Report
 
24. Re: THQ Files for Chapter 11; Plans Sale Dec 19, 2012, 17:19 Slashman
 
zombiefan wrote on Dec 19, 2012, 17:09:
WOOHOO!!! Champagne for everyone! Kiss my ass, THQ.

(passes around cigars)

Huh? Headscratch
 
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23. Re: THQ Files for Chapter 11; Plans Sale Dec 19, 2012, 17:09 zombiefan
 
WOOHOO!!! Champagne for everyone! Kiss my ass, THQ.

(passes around cigars)
 
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22. Re: THQ Files for Chapter 11; Plans Sale Dec 19, 2012, 17:02 Beamer
 
ViRGE wrote on Dec 19, 2012, 16:36:
Well crap. I really hope this doesn't mean they start screwing with the dev cycles of the few games they have in production. THQ has a good lineup planned, but if they aren't allowed to incubate then it won't really matter.

Their new president is one of the last people that would ever do this, but given that he's now totally responsible I wouldn't be surprised if his viewpoint has begun to shift.

Depends on how much rope they're giving him. Good leaders with good ideas become bad leaders with desperate ideas very quickly when they have numbers in freefall. It's hard to take huge risks when you don't have much room.
 
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http://www.hydrahead.com
http://www.painkillerrecords.com
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21. Re: THQ Files for Chapter 11; Plans Sale Dec 19, 2012, 16:36 ViRGE
 
Well crap. I really hope this doesn't mean they start screwing with the dev cycles of the few games they have in production. THQ has a good lineup planned, but if they aren't allowed to incubate then it won't really matter.  
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20. Re: THQ Files for Chapter 11; Plans Sale Dec 19, 2012, 16:31 Beamer
 
Kajetan wrote on Dec 19, 2012, 16:07:
Beamer wrote on Dec 19, 2012, 15:54:
To keep them afloat for the next few months.
Do you KNOW that or are you just guessing like everyone else? This money could also be used to pay a management bonus, because they did so well in managing the transition to Chapter 11.

Stop being paranoid. They just got a nearly $40 million dollar loan to help them get through the next few months. Notice that's "loan," meaning it needs to be paid back. They're desperate for money. Desperate to stay alive. The last thing they want to do is shuffle off into the sunset.

Do the execs want to get paid for doing a good job here? Yes. Yes they do. But they're not dumb enough to take money out of the coffers when they're struggling to stay alive at a time that they know that being bought out will mean even more money for them. And by that I mean that, if they don't want to stay with the company, they'll be paid a good amount to go away.
 
-------------
Music for the discerning:
http://www.deathwishinc.com
http://www.hydrahead.com
http://www.painkillerrecords.com
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19. Re: THQ Files for Chapter 11; Plans Sale Dec 19, 2012, 16:26 Creston
 
Beamer wrote on Dec 19, 2012, 15:47:
Creston wrote on Dec 19, 2012, 15:33:
Can someone explain what's entailed in a Section 363 sale process?

Is there any chance of them continuing the way they have been, at all? I'd hate to see Saints Row go under...

Creston

A separate entity buys the rights to auction the company, in essence. THQ is somewhere along the lines of an $8 million dollar company. The rights to auction it were purchased for $60 million, so clearly people think it has value. If no one bids $60 million Clearwater gets THQ. If anyone bids more Clearwater gets a commission on that. That $60 million includes $10 million to debtors, but otherwise it's a sale of assets and not debts.

THQs goal is to still exist. Their stock is going to be delisted, but they fully expect to still exist. They're looking for someone larger to purchase them and keep them going. THQ has zero value to anyone not looking to do a video game company, so they'd stick around in some form. If you're in the home office, you should fear for your job. If you're in Volition you should fear what happens if a sale takes too long and cash runs out, but otherwise you have a future.

But what will ultimately happen if this is successful is that someone will own THQs value but not most of their debt (some of their purchase goes to that debt.) This leaves THQs only overhead being things like salaries and occupancy. They're mostly a healthy company like that, which is why they're doing this, but they saw no way to get out on their own.

Thanks for the explanation.

Creston
 
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38 Replies. 2 pages. Viewing page 1.
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