Proposed plans by "Saints Row" publisher THQ to have a smooth bankruptcy buyout by the Clearlake Capital group were put on hold Friday by U.S. courts following objections from creditors.
The company originally wanted to be bought out wholesale by the company, which would allow them to absolve their debts and remain intact while they continued development on their three announced projects -- "Metro Last Light," "South Park: The Stick of Truth" and "Company of Heroes 2" -- and several unannounced projects, including the next entry in the "Saints Row" franchise. But creditors objected since the proposed 30 day notice of the bankruptcy proceedings wasn't long enough to court other buyers -- something the publisher wasn't interested in.
Those plans have been halted, according to the Distressed Debt Investing Club blog and Twitter account. Judge Mary Walrath, the judge assigned to oversee THQ's bankruptcy proceedings, denied their motion for debt in possession (DIP) funding, which would allow them to keep operating through the bankruptcy.
"She instructed parties to discuss and work out their issues over the weekend and set a new hearing on Monday," the blog states.
Currently there are five companies interested in buying THQ. Only one, Warner Bros. Interactive Entertainment (WBIE), is interested in buying the company en masse, which is one of the conditions Clearlake has established. Warner Bros. was the company that bought much of Midway's assets, including the "Mortal Kombat" property, following its bankruptcy in 2009. The other unnamed buyers, according to Distressed Debt Investing, just want to buy their own pieces and leave the rest.
A new hearing is set for 10:30 a.m. Monday, which should set the groundwork to determine whether THQ as gamers know it will survive, or whether it will be dissolved and disseminated across several other companies.
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