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Subject: So THQ has been delayed...

THQ's quick sale blocked in response to creditors' complaints

Last week we brought news that THQ's hopeful quick sale to the equity firm Clearlake was in trouble, following objections raised by a US Trustee and the publisher's own creditors. Today, a US judge has upheld those objections, saying the proposed sale process hasn't given potential buyers enough time to make a bid.

The Clearlake sale was scheduled to complete this week, but US bankruptcy judge Mary F. Walrath has found in favour of the creditors, noting that the aggressive timetable had pushed out other interested parties. "I have problems concluding that the pre-petition sale process was fulsome," she said, finding problem with the way THQ "did not even put out to the public that it was for sale" until after Clearlake had signed a non-disclosure agreement over the deal.

Walrath cited 10 possible buyers that had contacted THQ following its bankruptcy, saying this was evidence that the publisher wasn't doing everything it could to maximise the sale price. She also queried THQ's desire to be sold wholesale, saying "individual titles may have substantial value," and adding that the requirement to purchase the company in its entirety "may depress bids." Despite these concerns, as yet no ruling has been made on whether this requirement will also be blocked.


Sauce.

Now I am not an economics man, but the sentence I've underlined makes no sense what so ever to me. Why should THQ actively try to increase it's sale price rather than go for the safe option?

  • 01.07.2013 8:35 AM PDT
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Gamertag: TB Dark

I'm just enjoying my Saints Row 2 that I got a few weeks ago

  • 01.07.2013 8:36 AM PDT

I swear to DRUNK, I'm not GOD!

Whatever the result, I just hope the games under THQ's label don't die. I've had quite a bit of fun with Company of Heroes, Saints Row 3, and Warhammer 40K: Dawn of War 2 over the past few weeks since purchasing the THQ bundle over Steam.

  • 01.07.2013 8:41 AM PDT
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Foman is my favorite moderator. <3

Complicated answer to your question OP, because there can be many reasons.

There are a lot of incentives for THQ management to want to move quickly through bankruptcy, some devious, some not.

For the devious side, Clearlake might for instance be willing/seem to be willing to allow current upper level management to keep their jobs. Frequently new debtholders fire all the management staff and start fresh. Accepting Clearlake's lower offer might mean less value for the company, but ensure that THQ management retains their jobs and high pay.

For the less devious side, a quick emergement from bankruptcy allows the company to resume more normal operations more quickly with the current debt being restructured faster or on more favorable terms with the new owners.

The incentive to THQ is speed and a return to the old normal - the incentive to debtholders is (in most cases) a high valuation so they get more return on the debt they have. You can view the incentives as analagous to a short sale on a mortgage - the borrower just wants to get out and doesn't care what the house is sold for while the bank, the creditor, wants to maximize value so they lose less money on the mortgage.

[Edited on 01.07.2013 9:12 AM PST]

  • 01.07.2013 9:10 AM PDT