Friday saw THQ go before a judge at its bankruptcy hearing, where the court learned of its five interested buyers and the beleaguered publisher received criticism for its sale tactics.
More below.
Just before the Christmas season THQ declared bankruptcy, announced a 30 day sale period, and revealed that Clearlake Capital Group would act as a “Stalking Horse Bidder”.Essentially, this meant they would beable to cancel certain debt obligations and retain substantial control of their studios and licenses, all while bringing in more cash from the sale.
Not everyone was happy with this news, namely those owed money by THQ, those looking to buy the publisher’s assets, and USJudge Mary Walrath.
Wilmington Trust, WWE, Silverback Asset Management, Mattel, and Viacom are all trying to get money out of THQ and stand to lose it if THQ get their way in this bankruptcy hearing. They complained to the court that a 30 day sale wasn’t long enough to court potential buyers, buyers who would agree to recompense the creditors current debts. As it stands, should Clearlake acquire THQ at the end of the month, which they are currently committed to do, they have stated that in seven years timethey will pay $10 million toeach company owed. Not a great deal for those who want their money now.
We learned on Friday, through Distressed Debt’s Twitter feed, that there are five buyers interested in snaffling up some of THQ’s assets. One of them is Warner Brothers. However, Clearlake won’t allow the sale of individual assets, it’s buy everything or buy nothing.
Following the discussion in court on Friday, Judge Walrath has denied THQ’sDebtor-in-possession motion request. The DIP motion would allow THQ’s managementto maintain control of the company through itsbankruptcy.
A new meeting has been scheduled for Monday.