Okay, let's get this straight right away -- this is some complicated business. Technically, THQ is not bankrupt, but they are in the process of selling off all of their assets including THQ's studios and the games they have in development. As part of this agreement, made with affiliates of the Clearlake Capital Group, THQ is required to file "voluntary petitions" under Chapter 11 of the U.S. Bankruptcy Court for the District of Delaware. THQ is changing, but it is not going anywhere. This is good news.
Chairman and CEO of THQ Brian Farrell helped to clarify the current situation with the following statement:
"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. 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."
The "strong financial partner" that Farrell mentions is also described as a "stalking horse bidder" earlier in the press release. In other words, Clearlake Capital has made a bid of $60 million for THQ's assets, along with a $10 million note to help with company's creditors. This is a preemptive bid, ie, before THQ may have needed to or necessarily wanted to file Chapter 11, but the bid was so generous they've decided to pursue it. As part of the 363 sales process, other companies are now allowed to make competing bids.
In layman's terms, THQ is actually still on solid ground. The Clearlake Capital Group is essentially offering to rescue the company before THQ has to rely on drastic measures. THQ community manager Mathew Everett even heralds the announcement as good news:
"Hmmmm... good news :)"
"You guys and gals are crazy... I am still with THQ and looking forward to sharing info about Turtle Rock Studios next game."
Basically, THQ gets bought by investors with experience in technology and gaming, all of its studios get to continue making their games, and for the interim no one gets laid off in the process. In the long-term, who knows exactly what will happen. For now, congratulations THQ on doing what's best for your employees, your games, and your community.
Read the press release yourself and decide whether this is good news or bad.