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I’ll buy that for a dollar: THQ’s assets divided, auctioned to highest bidder

THQ sold

At this point,  we’ve been detailing the ongoing fiscal collapse of once-mighty games publisher THQ for so long that we’re rapidly running out of novel things to say. The last time we covered the situation a bankruptcy Judge had denied the company’s stated plan to bounce back from its financial problems, saying that the scheme seemed designed to take advantage of those who might otherwise opt to place a bid on the beleaguered publisher’s assets. That auction concluded this morning, and while it brings sad news for THQ we’re just happy this whole saga is finally nearing its end.

As you may recall, the original idea proposed by THQ and its lawyers was that the company’s holdings would be sold to a group called Clearlake Capital. According to the plan, Clearlake would then hold these assets until  THQ had built itself back up enough within the gaming industry to buy all of its studios and intellectual property rights back from Clearlake. This would have been a choice situation for THQ, as it wouldn’t really lose any of its assets and could avoid laying off  employees. Unfortunately, that deal seemed a bit too sweet to Judge Mary Walrath, who ordered that THQ be divided into small pieces and sold to whichever individual or company ponies up the most cash. Under Judge Walrath’s orders, Clearlake was still eligible to bid on THQ’s assets but it would have to compete openly with the general public.

Unfortunately for THQ’s plan, after an auction process that ran for 22 hours, it was decided that the company could raise much more money by selling its assets individually. THQ CEO Brian Farrel and president Jason Rubin wrote a letter to their employees explaining the situation, and offering a surprisingly candid list of who now owns THQ’s erstwhile assets. Venturebeat published a copy of this missive and you can read the full text there, but the most crucial points are as follows:

While much will be written, here are the facts of the bids and auction that occurred today:

  • Yesterday morning, we received a competing bid for the operating business, along with Clearlake’s offer, and numerous offers for separate assets.
  • During an auction process that lasted over 22 hours, the final conclusion was that the separate-asset bids would net more than a single buyer for the majority of the company.
  • Shortly, we will, present the results to the U.S. Bankruptcy Court, which must concur with our assessment.
  • The proposed sales of multiple assets is as follows :
    • Sega agreed to purchase Relic
    • Koch Media agreed to purchase Volition and Metro
    • Crytek agreed to purchase Homefront
    • Take 2 agreed purchase Evolve and
    • Ubisoft agreed to purchase Montreal and South Park

We expect these sales to close this week.

Rubin and Farrel then go on to thank their employees for their dedication and hard work. They expect the new owners of THQ’s studios to retain the majority of their employees, though realistically neither Rubin nor Farrel have any true knowledge or control over what these companies plan to do with THQ’s former holdings. Koch Media probably won’t turn Volition’s development studio into a 4,000 square foot executive sauna, but now that it owns the developer there isn’t much to stop the firm’s exuectives from languidly relaxing in a steam-filled, muggy room that once spawned Saints Row The Third.