Video game developer THQ files for bankruptcy, with assets to be acquired by private equity firm Clearlake Capital Group.
SAN FRANCISCO --
Videogame maker THQ has filed for Chapter 11 bankruptcy, according to a report by the Wall Street Journal, and said its assets will be acquired by affiliates of private equity firm Clearlake Capital Group.
Clearlake has offered a total of around $60 million, including a new $10 million note for the company's creditors. THQ said it hopes the sale will be completed in about 30 days.
THQ also said Wells Fargo & Co. and Clearlake have agreed to provide debtor-in-possession financing of around $37.5 million, subject to bankruptcy court approval.
The company, best known for WWE wrestling games and its Saints Row franchise, said that its business will remain in operation through the sale, and added that its studios remain open and its development teams continue working. The company, which is also developing a game base on the South Park television show, doesn't plan to cut staff as part of the bankruptcy filing.
"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," said Chief Executive Brian Farrell.
Shares fell 12 percent on Wednesday to $1.22 before trading was halted on the news. The stock has dropped 84 percent since the start of the year.
Jennifer Wolfe is Director of News & Content at Animation World Network.