THQ files for Chapter 11 bankruptcy, selling assets to bidder

THQ, the publisher behind gameslike Saints Row and Homefront, has filed for bankruptcy. The company announced today that it entered into an Asset Purchase Agreement with a "stalking horse bidder" — a bidder chosen by the bankrupt company to avoid lower bids on THQ's assets — affiliates of Clearlake Capital Group, L.P. Up for bid are all of the assets of THQ's operating business, including the company's four owned studios and games in development.

THQ opted for Chapter 11 bankruptcy of the U.S. Bankruptcy Court for the District of Delaware to facilitate the sale. THQ has acquired approximately $37.5 million for debtor-in possession financing from Wells Fargo and Clearlake, pending Court approval.

Business operations will continue "without interruption during the sale period" with all of the company's studios remaining open and all of the development teams continuing their work. THQ expressed confidence in its existing pipeline of games which includes Metro: Last Light and Saints Row 4.

“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 Brian Farrell, Chairman and CEO of THQ. “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.”

“We have incredible, creative talent here at THQ," added Jason Rubin who joined THQ as President last May. "We look forward to partnering with experienced investors for a new start as we will continue to use our intellectual property assets to develop high-quality core games, create new franchise titles, and drive demand through both traditional and digital channels.”

According to the press release details, Clearlake has agreed to serve as the "stalking horse bidder" for a Section 363 sale process, which allows other interested parties to come forward with competing bids.

"Aggregate consideration offered by Clearlake for the purchase totals approximately $60 million, including a new $10 millionnote for the benefit of the company's creditors. The company is asking the Court for a schedule to complete the sale process in about 30 days," it reads.

As a result of the Chapter 11 filing, THQ expects to receive "notice" from NASDAQ informing the company that its shares will be delisted from the exchange within nine calendar days of notification.

This doesn't come as much of a surprise to many who were already expecting this, but there were a few hoping the company's last ditch effort with the Humble THQ Bundle, and its resounding success, could keep the publisher afloat.