THQ - Most assets sold - another auction in May - Crytek to buy Darksiders IP

With THQ declaring bankruptcy, you think we'll be seeing Hulk Hogan doing promo spots geared towards companies willing to rent their IPs?

"OOOOH YEAH, BROTHA. WE GOT DARKSIDERS AND SAINT'S ROW, ALL WHICH CAN BE YOURS FOR THE LOW, LOW COST OF $200 A WEEK."

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Found another article with some more numbers and info.

http://www.polygon.com/2012/12/19/3...nkruptcy-protection-selling-studios-and-games

They say no changes - but who knows what happens to those projects after the sale - that is, if they can sell them.
"THQ says its publishing business will continue "without interruption during the sale period" and that development continues at the company's owned studios."


[quote name='Ryuukishi']So... Chapter 11 bankruptcy means it will restructure its debt but stay in business, right? The games that are in development at its studios will remain on track?[/QUOTE]
 
Basically Chapter 11 allows THQ to say "Hey federal government, we can't pay it all off. However if you help us, we will be able to operate in a functional capacity. We still have products, we can still do this."

This is a financial restructuring that is going on with THQ and filing for a chapter 11 is a smart business move, a very smart one. Cleans their slate and allows them to still release their current ongoing products.
 
Aww man, this is disappointing when a mostly quality publisher goes under largely because of just one particular bad product (U Draw).
 
[quote name='RedvsBlue']Aww man, this is disappointing when a mostly quality publisher goes under largely because of just one particular bad product (U Draw).[/QUOTE]


It was not just one thing that went bad. THQ made a lot of mistakes in the past few years, U Draw was just the big picture blame.
 
We all knew this day was coming, it was just a matter of when. I don't have much hope for the individual IPs/studios with it being sold to a private equity company.
 
[quote name='j-cart']It was not just one thing that went bad. THQ made a lot of mistakes in the past few years, U Draw was just the big picture blame.[/QUOTE]

Yeah, but from what we've heard that seems to be the biggest and hardest hit they took which has had them on the ropes ever since.
 
uDraw cost them 100 million dollars in terms of the loss from it. Then they cancelled Saints Row 3 Enter the Dominatrix, had a failure launch of Darksiders 2, and delayed all of next years games until March. When they announced the march delays I sold.

If you look at my post above, it now makes perfect sense why the bonds were worth so little. THQ is selling for 60 million dollars. Wells Fargo's credit line is at least 20 million. They get paid back first. Then the rest (at most 40 million assuming the loan with WF hasn't increased in the last month) goes to the bond holders. Shareholders get $0.00 unless they win some lawsuits. We will see a bunch of them too. A lot of seemingly iffy stuff was going on and/or not being disclosed (at least so it appears to me).
 
[quote name='Blaster man']uDraw cost them 100 million dollars in terms of the loss from it. Then they cancelled Saints Row 3 Enter the Dominatrix, had a failure launch of Darksiders 2, and delayed all of next years games until March.[/QUOTE]

$100 million dollars in actual cost and who knows how much in potential lost sales/profit from the allocation of resources to it. Definitely one of the most severe hits they took in recent years.
 
[quote name='RedvsBlue']$100 million dollars in actual cost and who knows how much in potential lost sales/profit from the allocation of resources to it. Definitely one of the most severe hits they took in recent years.[/QUOTE]

In their 2012 Q4 conference call they specified a 100 million dollar write Dow. From uDraw losses. That's what I'm talking about. They literally accounted for 100 million in losses that quarter.
 
No matter how you look at it, that's a huge loss for a quarter for any publisher, but considering THQ has been practically hurting for several years now it was the nail in the coffin so to speak.

Sad too b/c they produced some nice games over the years. I loved the Dark Sider Series, Red Faction Arm, Saints Rows were pretty good and Iwas looking forward too Obsidian's South Park Stick of Truth as did others.

Maybe with the restructuring something good will come of this for the company, investors are screwed most likely but I would like to see THQ saved or purchased by decent company/studio. Disney/Marvel wouldn't be so bad I don't think but if Activision or EA purchases them I'll most likely ignore all those franchises from here on out. They ruin everything they touch for the most part.
 
[quote name='JN25WIL']No matter how you look at it, that's a huge loss for a quarter for any publisher, but considering THQ has been practically hurting for several years now it was the nail in the coffin so to speak.

Sad too b/c they produced some nice games over the years. I loved the Dark Sider Series, Red Faction Arm, Saints Rows were pretty good and Iwas looking forward too Obsidian's South Park Stick of Truth as did others.

Maybe with the restructuring something good will come of this for the company, investors are screwed most likely but I would like to see THQ saved or purchased by decent company/studio. Disney/Marvel wouldn't be so bad I don't think but if Activision or EA purchases them I'll most likely ignore all those franchises from here on out. They ruin everything they touch for the most part.[/QUOTE]


Dude, Company of Heroes 2, Stick of Truth, and Metro Last Light are all still going to come out under the THQ name. The chapter 11 is a good thing, not a bad thing for THQ.
 
I expect lawsuits for many years regarding this. It was never disclosed in an SEC filing that Jason Rubin (the company president) had a personal relationship with Centerview, the guys that were brought in to work out the "best" deal for THQ. Apparently Saint's Row sold 5 million copies yet the entire company is worth only 60 million dollars. I have a hard time believing that.

http://www.latimes.com/entertainmen...-games-raise-capital-20121105,0,7561290.story
Centerview senior advisor Skip Paul has close ties to Rubin, who joined THQ in May. Paul worked with Rubin when he was an executive at Universal Studios and more recently invested in Rubin's digital media start-up Flektor, which was acquired by Myspace.

http://www.startup-review.com/blog/flektor-case-study-counter-to-prevailing-web-20-wisdom.php
Flektor co-founders, Jason Rubin and Andy Gavin had previously co-founded Naughty Dog, a studio responsible for games such as Crash Bandicoot and Jak and Daxter that yielded ~$1B in retail sales. Despite such impressive credentials that could have afforded them relatively easy access to seed capital, the founding team (Jason, Jason, and Andy) opted to primarily self-fund the company, although they did take some investment from a personal friend, Skip Paul.
 
[quote name='Blaster man']I expect lawsuits for many years regarding this. It was never disclosed in an SEC filing that Jason Rubin (the company president) had a personal relationship with Centerview, the guys that were brought in to work out the "best" deal for THQ. Apparently Saint's Row sold 5 million copies yet the entire company is worth only 60 million dollars. I have a hard time believing that.

http://www.latimes.com/entertainmen...-games-raise-capital-20121105,0,7561290.story
Centerview senior advisor Skip Paul has close ties to Rubin, who joined THQ in May. Paul worked with Rubin when he was an executive at Universal Studios and more recently invested in Rubin's digital media start-up Flektor, which was acquired by Myspace.

http://www.startup-review.com/blog/flektor-case-study-counter-to-prevailing-web-20-wisdom.php
Flektor co-founders, Jason Rubin and Andy Gavin had previously co-founded Naughty Dog, a studio responsible for games such as Crash Bandicoot and Jak and Daxter that yielded ~$1B in retail sales. Despite such impressive credentials that could have afforded them relatively easy access to seed capital, the founding team (Jason, Jason, and Andy) opted to primarily self-fund the company, although they did take some investment from a personal friend, Skip Paul.[/QUOTE]

In order for the shareholders to establish a claim, they're essentially going to have to prove gross negligence. http://en.wikipedia.org/wiki/Smith_v._Van_Gorkom Is an interesting case to read in which the CEO personally sped up a merger with another company with basically a rubber stamping board. If this occurred in THQ they might have a solid claim but I can't imagine they would have been that negligent.

I really don't know much about THQ's situation at the end but a shareholder derivative suit is going to be difficult to maintain against Rubin because things were already in the shitter before he got there. Even if he came in with contacts setting up this buyout, that isn't against the law in and of itself.

Business Association laws are fascinating. It's pretty amazing what a board and CEO can get away with and not be held personally liable.
 
This stock will only trade on the exchange for 5 more days. I suggest you dump ASAP. I'm not sure if it's permanently untradable or if it goes OTC. If it goes OTC then you can still sell but at that point the price is going to be under a penny.
http://investor.thq.com/phoenix.zhtml?c=96376&p=irol-SECText&TEXT=aHR0cDovL2FwaS50ZW5rd2l6YXJkLmNvbS9maWxpbmcueG1sP2lwYWdlPTg2MTg0OTYmRFNFUT0wJlNFUT0wJlNRREVTQz1TRUNUSU9OX0VOVElSRSZzdWJzaWQ9NTc%3d

On December 19, 2012, the Company received a notice from The Nasdaq Stock Market notifying it that the Staff of The Nasdaq Stock Market had determined to delist the Company's common stock based on the following factors: (i) the Chapter 11 Filing and associated public interest concerns raised by it, (ii) concerns regarding the residual equity interest of the existing listed securities holders, and (iii) concerns about the Company's ability to sustain compliance with all requirements for continued listing on The Nasdaq Stock Market, specifically that the Company has not maintained a minimum Market Value of Publicly Held Shares (“MVPHS”) of $15 million for 30 consecutive trading days in compliance with Nasdaq Listing Rule 5450(b)(3)(C). Unless the Company appeals the determination, trading in the Company's common stock will be suspended at the opening of business on December 28, 2012, and a Form 25-NSE will be filed with the Securities and Exchange Commission which will remove the Company's common stock from listing and registration on The NASDAQ Stock Market. The Company does not intend to appeal the delisting determination.
 
In hoping the WWE license doesn't get screwed up over this. I really enjoyed WWE '13 and was really looking forward to the next installment.
 
i hope that metro,homefront,saints row get bought up by another company and continued since they were good games
 
Everyone's favorite THQ article from E3.
http://venturebeat.com/2012/06/12/t...or-a-bottom-and-staging-a-comeback-interview/

GamesBeat: It must be hard, still, to hear that the Internet at large is calling for your head. “Why is Brian still here?” or whatever. How do you work with that kind of criticism?
Farrell: [Chuckles] The good news or the bad news, depending on your point of view, is that I’ve been doing this a long time. I’ve been through these troughs before, and I’ve been through the peaks before. Both of those things, the peaks and the troughs, come from products, right?
 
[quote name='nixmahn']Your pic is wrong. Thats the Wii version, that actually sold well.[/QUOTE]

Oh shit! I'm not the original creator but reposted with authorization. I'll get back with them about that! FYI the grinch is Brian Ferrell for declaring bankruptcy right before Xmas.
 
[quote name='GHmanRON']In hoping the WWE license doesn't get screwed up over this. I really enjoyed WWE '13 and was really looking forward to the next installment.[/QUOTE]

Considering THQ owes WWE $45 million right now, there's a chance that WWE might get the license back through the courts. That way they can get some of the money selling the license to someone else. Because they'll probably never see that $45 million again from THQ.
 
[quote name='tangytangerine']Considering THQ owes WWE $45 million right now, there's a chance that WWE might get the license back through the courts. That way they can get some of the money selling the license to someone else. Because they'll probably never see that $45 million again from THQ.[/QUOTE]

You know anything about Game Workshop's Warhammer 40K license? Due they owe them money too?
 
[quote name='tangytangerine']Considering THQ owes WWE $45 million right now, there's a chance that WWE might get the license back through the courts. That way they can get some of the money selling the license to someone else. Because they'll probably never see that $45 million again from THQ.[/QUOTE]
The license owner typically gets it back in bankruptcy. I'd expect that the license to make WWE games will return to the WWE. The chances of them getting anything is very low. The reason is, Wells Fargo is owed 20 million dollars. Their loan is collateralized debt, the collateral being "substantially all of THQ and it's subsidiaries". So they get paid back first or they can seize the company. Second in line is the bond holders. They need to be repaid 100 million. Finally after they're made whole comes anyone else THQ owes money to and at this point the WWE has to fight with the other guys in this category for the scraps. This can include (but not limited to) employee compensation that wasn't paid, rents, electricity bills, other license's, and virtually any other debt you can think of.

Finally, if all of those people get paid back then the folks that own the stock get what's left. So in this case, THQ has indicated they have about 250 million in total liabilities. IF they were able to sell the company for 250 million, everyone would be paid back but the stock holders get zero dollars. But if they got 257 million then the stock holders get $1 per share (6.8 million shares are outstanding). If they got 300 million for the company (fat chance) then the stock holders would get $7 a share. So if you had some reason to believe that the company would get $300 million in bankruptcy, you could buy 1,000 shares right now at roughly 35 cents a share for a total of $350. Then when the company sold you'd be paid back $7,000!

Sadly the company isn't going to sell for what it's really worth. Selling catalog titles alone (games that aren't new releases) generates 100 million dollars a year!

[quote name='INMATEofARKHAM']You know anything about Game Workshop's Warhammer 40K license? Due they owe them money too?[/QUOTE]
AFAIK it wasn't mentioned in the court docs.
 
That's it, last day on the Nasdaq is over. I hope you guys sold your shares. If anyone's still holding shares you can try to sell after hours though the stock has come down a bunch since the market closed.

0.31
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0.04(10.86%) 3:59PM EST|After Hours : 0.26
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0.06 (17.63%) 4:30PM EST
 
Go get 'em! This is the kind of crap I've been talking about.

http://www.gamesindustry.biz/articles/2013-01-03-thq-creditors-us-trustee-object-to-quick-sale
http://venturebeat.com/2013/01/03/thq-lenders-object-to-its-fast-track-bankruptcy-sale/


http://www.law360.com/articles/404245/creditors-blast-bankrupt-game-maker-thq-s-sale-plan


Creditors Blast Bankrupt Game Maker THQ's Sale Plan


Law360, Wilmington (January 02, 2013, 10:24 PM ET) -- Creditors of video game producer THQ Inc. asked a Delaware bankruptcy judge Wednesday to reject its bid procedures, arguing that the proposed terms for the Chapter 11 auction were crafted not to maximize value but to ensure a sale to stalking-horse bidder Clearlake Capital Group LP.

California-based THQ entered court protection Dec. 19 with a prepackaged plan envisioning a $60 million sale to private equity firm Clearlake, but an ad hoc committee of the company's noteholders claims the terms of the proposed Section 363 sale will serve to chill competitive bidding rather than promote it.

Bid procedures should promote a robust auction, the committee said, but those proposed by the debtor — including an “unjustifiably accelerated sale timeline” calling for a Jan. 9 auction, Jan. 10 sale hearing and a closing by Jan. 15 — would have the opposite effect and “appear to have been designed specifically to thwart any potential bidders from stepping forward to compete with Clearlake’s bid.”

Representing creditors holding 41 percent of the $100 million in senior notes that make up the lion's share of THQ's debt, the committee holds that a title-by-title sale of the company's video game lines would provide a greater return to investors.

The committee blasted a sale provision that would allow THQ to reject any offer that does not include substantially all of the company's assets, “notwithstanding that there is reason to believe that more value may be generated by a sale of the debtors’ assets on a 'piecemeal' basis.”

At a first-day hearing, THQ counsel Jeffrey C. Krause said the hurried sales process was made necessary by the terms of its debtor-in-possession financing package as well as the fact that the company would run out of cash by Jan. 15 even with the added financing.

The time line, while not ideal, offered the only alternative to a complete shutdown and breakup of the company, Krause said, and it would be “better to sell at these terms than be forced to liquidate.”

U.S. Trustee Roberta A. DeAngelis also took issue with the proposed bid procedures, filing a separate objection Wednesday that voiced additional concerns regarding the auction conditions.

Besides echoing the committee's concerns about the expedited schedule, the trustee said the provision requiring the first bid to top Clearlake's offer by at least $2.75 million would further restrict competition and should be removed.

“Such a sizeable initial overbid may chill bidding by discouraging potential bidders from participating in the proposed auction,” the trustee said.

The procedures also violate the local rule requiring that auctions be conducted openly with all creditors permitted to attend, the trustee said, claiming they seek to limit attendance to representatives of the qualified bidders, debtors, DIP lenders and any statutorily appointed committees.

“There does not appear to be justification for waiver of this requirement in this case,” the trustee said.

A hearing on the bid procedures and the final DIP order will be held Friday before U.S. Bankruptcy Judge Mary F. Walrath.

THQ, which designs and publishes video games for home consoles, computers and other platforms, sought court protection along with its four U.S. subsidiaries Dec. 19 citing a prolonged cash crunch made worse Nov. 7 when lender Wells Fargo Capital Finance LLC declared an event of default, which Krause said “created much bigger indirect issues.”

The company's product line includes wholly owned franchises “Saints Row” and “Company of Heroes” and its World Wrestling Entertainment games produced under a licensing agreement, and it currently is developing a game based on “South Park” set to be released in 2013, as well as a new title from the creator of the successful “Assassin's Creed” series.

The ad hoc committee is represented by Paul N. Silverstein, Jonathan I. Levine and Jeremy B. Reckmeyer of Andrews Kurth LLP.

THQ is represented by Michael R. Nestor, M. Blake Cleary and Jaime Luton Chapman of Young Conaway Stargatt & Taylor LLP and Jeffrey Krause, Jonathan Layne, Ruth Fisher, Oscar Garza and Cromwell Montgomery of Gibson Dunn & Crutcher LLP.

The case is In re: THQ Inc., case number 1:12-bk-13398, in the U.S. Bankruptcy Court for the District of Delaware.

--Editing by Richard McVay.
 
[quote name='matrix9280']Darksiders 2 5 dollars soon?[/QUOTE]

This won't impact the price of the games. Based on live tweets from court, looks like THQ's management is having a tough time in court.
 
[quote name='matrix9280']Darksiders 2 5 dollars soon?[/QUOTE]

Kingdoms of Amalaur price still kicking fairly high, many months after that debacle/closure. Though that is probably more due to EA, huh?
 
[quote name='Kazaganthi']Kingdoms of Amalaur price still kicking fairly high, many months after that debacle/closure. Though that is probably more due to EA, huh?[/QUOTE]

How does that work, by the way? EA gets paid for each copy sold, but they don't have to give 38 Studios a cut anymore, since 38 doesn't exist? If so that's a pretty sweet deal for EA.
 
I hope more news agencies continue to pick up on this scam of a bankruptcy.
http://www.bloomberg.com/news/2013-...l-of-bankruptcy-sale-process-and-loan-1-.html

[quote name='Ryuukishi']How does that work, by the way? EA gets paid for each copy sold, but they don't have to give 38 Studios a cut anymore, since 38 doesn't exist? If so that's a pretty sweet deal for EA.[/QUOTE]
I don't know much about the 38 studios bankruptcy but generally speaking these proceeds and any other monies they get (such as for the sale of the studio and IP's going forward) will be held until it's decided how the creditors will be paid. In this case, the government will almost always be first so the state of RI will get all the money since they're owed so much and no one else that's owed money will get anything.
 
It's kind of funny how they were talking about no layoffs. I'm not sure how they are going to pull that one off now.
 
[quote name='advanced']What happens to the South Park game now? :cry:[/QUOTE]


It suffers the fate of all Obsidian games. Critically panned, universally accepted as a hidden gem and sales are not met which cancels any chance for the title to garner a sequel of any type.

Honestly? No clue, but I sure hope they find a way to release it.
 
[quote name='Ryuukishi']So what happens if one bidder purchases the Saints Row IP and another buys Volition? Saints Row 4 is SOL?[/QUOTE]
It won't work out that way. The court's job is to ensure that the most money possible is paid for the assets so that the creditors are paid back as much as possible.

[quote name='advanced']What happens to the South Park game now? :cry:[/QUOTE]
Someone buys it and releases it in a couple more months. This could actually be good news for it since the buyer will only have the purchase price in it and not all those years of development costs. That means they may give more time to fix the bugs. Obsidian is making it and they're well known from KOTOR 2 to have problems at times.

[quote name='Spokker']It's kind of funny how they were talking about no layoffs. I'm not sure how they are going to pull that one off now.[/QUOTE]
That was always bullshit. Rubin was trying to steal the company and as soon as he owned it and games came out, you can be damn sure he'd have done layoffs. Now there's no pretense, there will definitely be layoffs. Developers should be okay. If I were overhead staff like accounting or whatever, I'd be sending my resume out.
 
[quote name='j-cart']It suffers the fate of all Obsidian games. Critically panned, universally accepted as a hidden gem and sales are not met which cancels any chance for the title to garner a sequel of any type.

Honestly? No clue, but I sure hope they find a way to release it.[/QUOTE]

At this point? I'll be happy if it's released. This THQ business has me all sorts of worried. A sequel would be great, but I don't know if this is the type of game that would even garner that kind of talk. It's definitely possible, as it's a licensed game and all.

[quote name='Blaster man']
Someone buys it and releases it in a couple more months. This could actually be good news for it since the buyer will only have the purchase price in it and not all those years of development costs. That means they may give more time to fix the bugs. Obsidian is making it and they're well known from KOTOR 2 to have problems at times.
[/QUOTE]

Thanks for the rosy outlook. I'll be really upset if I can't get my hands on this because THQ went under.
 
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