The light at the end of THQ's long, dark financial tunnel dimmed slightly Thursday after lenders contested the embattled publisher's bankruptcy and sales plans.
The California-based "Saints Row" publisher announced in December it was filing for Chapter 11 Bankruptcy, allowing an outside company to purchase the company en masse, paying off creditors and allowed the company to continue working as normal. It currently has three announced titles -- "Company of Heroes 2," "South Park and the Stick of Truth" and "Metro Last Light" -- in development, scheduled for release some time this year. It finally looked like the company's long-standing financial woes could be put behind it. Not so fast, according to VentureBeat. Several lenders made filings Thursday arguing that the bankruptcy plan "was orchestrated to benefit the company's newest executives and their friends at a financial firm hired to sell THQ."
Those are strong words. Financial firm Clearlake Capital is currently set to purchase THQ for a little more than $60 million if the sale is approved by U.S. courts, which will be determined Jan. 19 -- 30 days from its initial filing. This quick turnaround is too short according to the lenders, which have loaned a combined $41 million -- 41 percent of the publisher's $100 million debt. They contend the 30 day period does not give other potential buyers enough time to make an offer for the company's assets.
Lenders aren't the only one crying foul over the publisher's bankruptcy plans. United States trustee Roberta DeAngelis issued a formal objection, alleging that fees and reimbursements associated with the sale are "excessive," and that Clearlake would have too much control over the sale process. Going a step further, DeAngelis accuses THQ of manufacturing the crisis, saying the company could have sold off its various properties to earn money to offset bankruptcy.
"The lenders who objected clearly wanted THQ to consider selling off its game properties piecemeal, but Clearview shopped the company as a whole," VentureBeat said.
Whether selling the company as a whole is good for investors or not, it is actually good news for gamers. The industry's last major financial collapse was Midway, which ended up going under in 2009. Its assets, including the rights to several popular franchises like "Mortal Kombat," were spread around to several publishers -- most notably Warner Bros. Interactive Entertainment. Keeping THQ together means the publisher can continue to develop its announced titles and release them in a timely manner.