The end is nigh for THQ as a U.S. Bankruptcy Court ruled Monday that its assets will be auctioned off piecemeal to cover its $100 million in debt.
The ruling comes as a major blow to the embattled California-based publisher, which was counting on its Chapter 11 Bankruptcy plans to be approved in order to continue operating. Under its initial plan --announced Dec. 19 -- THQ would be purchased wholesale by Clearlake Capital, giving the company cash flow to continue its remaining announced projects -- "Metro Last Light," "Company of Heroes 2" and "Metro Last Light." The plan was contested by THQ creditors last week, who argued buyout was orchestrated between the publisher and Clearlake.
A bankruptcy court judge agreed with creditors in a hearing Monday, according to Business Week. The creditors requested an additional three weeks for the bankruptcy bidding process, and that buyers be allowed to buy individual assets. The judge ruled that THQ's pre-announcement marketing was insufficient, and that buyers only came forward after it was announced the company was filing for Chapter 11 bankruptcy, and that Clearlake was purchasing the company. Further, she ruled there is significant value in the company being sold piecemeal, rather than being sold in bulk, as had been requested.
According to the Distressed Debt Investing Club Twitter account, THQ and its creditors came to an agreement following the judge's ruling, setting up an auction Jan. 22. Individual assets -- including studios, both announced and unannounced games in development, licenses and properties -- will be put up for bidding. Among the confirmed bidders are Electronic Arts, Warner Bros. Interactive Entertainment and Clearlake, which is hoping to buy the company outright through purchase of individual assets.
This does not bode well for the future of THQ -- or for gamers -- as many of these projects might not ever see the light of day.