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THQ files for Chapter 11 bankruptcy protection; properties to go up for auction, but no games to be cancelled

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We’ve known for quite some time that THQ, publisher of such hits as Saints Row The Third and Darksiders, was experiencing massive financial issues. Less than a month ago the company partnered with the people behind the Humble Indie Bundle to release an inexpensive collection of older THQ games in what seemed a last-ditch effort to raise some cash. Today the company has filed for Chapter 11 bankruptcy protection and has entered into an agreement with the Clearlake Capital Group to sell off its extant assets.

“To facilitate the sale, THQ and its domestic business units have filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Court for the District of Delaware,” reads THQ’s official investor relations announcement. “The company’s foreign operations, including Canada, are not included in the filings. The company has obtained commitments from Wells Fargo and Clearlake for debtor-in possession (DIP) financing of approximately $37.5 million, subject to Court approval.”

So what’s to become of the games THQ had in development? Assuming everything goes according to the firm’s plans, consumers won’t really notice any true change. “THQ will continue operating its business without interruption during the sale period, subject to Court approval of THQ’s first-day motions,” THQ claims. “All of the company’s studios remain open, and all development teams continue.” Further, THQ has stated that despite this unfortunate financial turn, the company has no plans to lay off its staff, or cancel any projects — at least no projects that the public is aware of anyway.

If you’re not up to date on bankruptcy law, the layman’s version of this situation is as follows: Clearlake Capital Group has agreed to serve as a “stalking horse bidder” for THQ’s existing intellectual property assets and its studios. Effectively, THQ is selling its property to Clearlake which will then sell said property at auction. Clearlake plans to price the entirety of THQ’s assets at $60 million (which includes a $10 million note earmarked as a show of good faith to THQ’s debtors). For its part, THQ seems quite confident that this scheme will allow it to eventually resume normal operations.

“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 THQ CEO Brian Farrell. “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.”

Whether you see Farrell’s words as politically beneficial diplomacy or genuine hope is entirely up to you, but we’re happy to hear that the company’s troubles won’t affect the games it has planned to release in the near future and, more crucially, that no one will be losing their jobs during the holiday season.