THQ files for bankruptcy to sell “substantially all” assets to bidder [Update]

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[Update] Thanks to work by Polygon, the working titles of four previously unannounced THQ games have been revealed as a result of the bankruptcy filing – details below. [End of Update]

New THQ Logo Large

THQ announced today that the publisher has filed for bankruptcy under Chapter 11 of the US Bankruptcy Court for the District of Delaware. This move is in order to facilitate the sale of “substantially all” of the company’s assets to affiliates of Clearlake Capital Group, L.P. – assets that include all four of THQ’s owned development houses and all games currently in development.

“The sale will allow THQ to shed certain legacy obligations and emerge with the strong financial backing of a new owner with substantial experience in software and technology,” wrote THQ in a press release.

But What About the Games?

Thanks to a $37.5 million ‘debtor-in possession’ agreement with Wells Fargo and Clearlake, operation of THQ will continue as normal as the sale is approved and executed, while studios including Volition, Relic, 4A and Obsidian complete work on their currently-in-development titles.

“All of the company’s studios remain open, and all development teams continue,” THQ assured us. In addition, consumers and retailers should see no outward change in operations, while the publisher’s workforce is said to not be affected as bankruptcy filing and the sale are completed. THQ does expect to be removed from the NASDAQ stock exchange, however, “[as] is the case after a Chapter 11 filing.”

Who Is Funding the Transition?

In addition to the $37.5 million special financial aid, private investment firm (which focusses on special situations and private equity investments) Clearlake Capital Group, L.P. has agreed to serve as something called a ‘stalking horse bidder,’ which will in the interim allow competing bids for THQ’s assets to be entertained.

Clearlake puts the value of THQ at approximately $60 million, “including a new $10 million note for the benefit of the company’s creditors.” THQ and Clearlake hope to complete the entire sale process within 30 days.

The Final Statement

Chairman and CEO of THQ Brian Farrell wrote in a statement:

“The sale and filing are necessary next steps to complete THQ’s transformation and position the company for the future, as we remain confident in our existing pipeline of games, the strength of our studios and THQ’s deep bench of talent.

“We are grateful to our outstanding team of employees, partners and suppliers who have worked with us through this transition. We are pleased to have attracted a strong financial partner for our business, and we hope to complete the sale swiftly to make the process as seamless as possible.”

The Best is Yet to Come?

THQ and its associated studios are currently working on Company of Heroes 2, Metro: Last Light, South Park: The Stick of Truth and the fourth game in the Saints Row franchise. Vigil’s current project is unknown, while the publisher had previously partnered with Crytek UK to create a Homefront sequel.

While the release of Relic, 4A and Obsidian’s known titles remain a certainty, the future of Homefront 2 and a possible Darksiders 3, as well as mystery projects in the works under Patrice D

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