THQ bidder Clearlake Capital Group has agreed to sell franchises belonging to bankrupt publisher THQ on a title-by-title basis to potential buyers, one of which is Electronic Arts, according to a tweet from Distressed Debt Investing.
Clearlake Capital, the group that sought to purchase THQ's assets shortly after the company declared bankruptcy in December, has agreed to allow potential buyers to purchase rights to titles individually and hold bidding until Jan. 15. According to DDI, Judge Marry F. Walrath said Clearlake's proposed timing is not enough, and today's hearing will focus on the use of cash collateral, cash collected from the liquidated assets. DDI added via Twitter that these proposals were just that — proposals from Clearlake — and that nothing is "in stone yet."
The hearing took place at 10:30 a.m. in the District of Delaware's U.S. Bankruptcy Court and was heard by Judge Mary F. Walrath.
In a hearing last Friday, Judge Walrath did not approve bidding procedures for the case, instructing all parties to "talk with one another to work out issues" before today's hearing. As of this morning, involved parties have still not reached an agreement.
DDI also reports that Electronic Arts, a potential buyer of "certain" individual THQ titles, has completed site visits to THQ headquarters. EA is among a group of other interested publishers, including Warner Bros.
Last week DDI tweeted that banker Sam Greene of Centerview Partners, the investment company that assisted THQ with the quick sale, testified that five buyers are interested in purchasing individual games and franchises from company, but not the publisher's entire lineup.
A group of the company's lenders filed an objection in Delaware court against the sale, stating the quick turnaround doesn't afford opportunities for competitive bids and that franchises should be sold on a title-by-title basis, not as a complete series. THQ defended the short sale window as necessary, stating the company would likely run out of money within the month.
Polygon has reached out to both THQ and Electronic Arts regarding EA's role as a potential buyer, and will update this story with more information as we have it.
Update: THQ will auction off its titles and assets "title by title" in an auction on Jan. 22 as agreed upon by participating parties in today's hearing, according to a tweet from DDI.
Update 2: Bids are due at 9 a.m. on Jan. 22 and the auction will be held at 3 p.m. A sale hearing will take place the following day at 9 a.m. DDI noted that bids will only be open for "certain assets (titles, studios, e.t.c.)" in the auction.
Clearlake Capital's DIP term loan was also extended to Jan. 25th and the group will remove the $10 million, 2 percent note originally offered to extend the auction's deadline.
According to DDI, during the hearing it was also noted that the company has begun to "slow pay" its bills, which in theory increases assumed liabilities to its purchasers but lessens the company's immediate need for cash. Clearlake can choose what liabilities it will assume, which will be made known at the auction.
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