Joel R. Glucksman
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201-896-7095 jglucksman@sh-law.comFirm Insights
Atari Inc. Files for Chapter 11 Bankruptcy Protection
Author: Joel R. Glucksman
Date: January 24, 2013
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Filing for Bankruptcy Protection
The U.S. arm of video game maker Atari filed for Chapter 11 bankruptcy protection under bankruptcy law in a U.S. Bankruptcy Court in New York.
The popular game maker along with three of its affiliates filed for protection in an effort to distance itself from its French parent and find a buyer willing to take the company private. Atari has been struggling to keep up with other game publishers that are creating app versions of its games to appeal to an increasingly mobile platform. Atari followed suit by creating many of its games in app format, but noted that the shift left its finances largely depleted and unable to finance continued growth.
In addition, a failed $28 million-dollar agreement with Atari’s main shareholder, BlueBay Asset Management, also rendered the company unable to release and gain revenue from a game currently in production entitled “Atari Casino.” Its parent company, Atari SA, is also experiencing financial difficulties, and filed for similar bankruptcy protection in France.
“In light of the current situation with BlueBay, we have decided to take what we think is the best decision to protect the company and its shareholders,” said Atari CEO Jim Wilson. “Through these ongoing procedures, and especially the auction process in the U.S., we will seek to maximize the proceeds in the best interest of the company and all of its shareholders.”
The 31-year-old company said it plans to continue operations as normal while it undergoes reorganization and hopes to sell or restructure its assets within 90 to 120 days. The U.S. Atari section has also received approval for $5 million in debtor-in-possession financing from Tenor Capital, which specializes in distressed lending.
Atari is recognized for several popular games, including “Pong,” “Breakout,” “Asteroids,” “Centipede,” “Missile Command” and “Rollercoaster Tycoon.”
If you face bankruptcy issues in your business or would like to discuss the topic above, please call me, Joel Glucksman, at 201.806.3386.
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