THQ's Bankruptcy Receives Objections from Creditors and U.S. Trustee
THQ might not be sold off so quickly due to last minute interventions
The ongoing bankruptcy process started by THQ last month is in danger of not reaching its conclusion next week, as a U.S. Trustee and a group of creditors that supported THQ in the past have posted objections, thereby impeding the whole procedure.THQ, after months of struggling to stay profitable and keep its different studios open, filed for bankruptcy last month, immediately confirming that it already has a buyer lined up, in the form of Clearlake Capital.
Under the Chapter 11 bankruptcy law, THQ started a process that required it to wait another 30 days in order for other companies to make bids for it and, if no one appears, Clearlake can officially start taking over the publisher.
Now, the whole bankruptcy procedure is in danger, as a group of creditors and a U.S. Trustee have filed objections in the case, according to Distressed Debt Investing blog.
First up, U.S. Trustee Roberta DeAngelis has objected to THQ's proposed auction process in bankruptcy court, as she believes that the process is way too short to allow companies other than Clearlake to make a bid for it.
What's more, the fact that Clearlake needs to pay $2.25 million (€1.7 million) if another company buys THQ, is also a red flag, according to DeAngelis.
Another objection was also filed by a group of THQ creditors, who believe that THQ is acting in its own interest by offering to sell the company as a whole, instead of selling certain franchises and thereby attracting more buyers.
"Taken as a whole, the bidding procedures are designed specifically to ensure that Clearlake is the successful bidder and that the Debtors' business will continue as a 'going concern,' whether or not such outcome would be in the best interests of the Debtors' unsecured creditors and/or maximize the value of the Debtors' estates," the committee stated.
THQ's bankruptcy procedure states that it's accepting offers until January 9 and that a sale is going to be confirmed on January 10.
Considering these two new objections, the whole process might be delayed.