The U.S. arm of Atari has filed for Chapter 11 bankruptcy in New York as part of an effort to separate itself from its financially troubled French parent company, reports latimes.com (thanks Develop). Here's an excerpt that sums up the situation:

But the company's growth potential has been hampered by its near total reliance on London financial company BlueBay Asset Management for cash. A $28-million credit facility with BlueBay lapsed Dec. 31, leaving Atari without the resources to release games currently in the works, including a real-money gambling title titled "Atari Casino."

Efforts to recapitalize the corporation have been unsuccessful, in part because of its complex structure as essentially an American business with a French public stock listing.

Shares in Atari S.A. have dropped in value from more than 11 Euros in 2008 to less than 1 Euro recently.

Atari Inc. has secured a commitment for $5.25 million dollars in debtor-in-possession financing to continue operations and release games. If Chapter 11 is successfully completed, the U.S. business could reemerge with its own resources and little or no debt to BlueBay.

It's not yet clear who might step up to buy Atari Inc., although Wilson will probably seek backers to help him keep control. It's also possible the company could be sold to another buyer, whole or in pieces.