Atari files for bankruptcy

Atari files for bankruptcy

Video game innovator Atari has filed for bankruptcy in a bid to cut ties with its troubled French parent holding business.

The US branches of Atari â€" Atari Inc, Atari Interactive Inc, Humongous Inc and California US Holdings, have jointly filed petitions for relief under Chapter 11 of the United States Bankruptcy Code.

Atari SA and Atari Europe SAS have also filed for connected procedures before the French courts

With this move, the US-primarily based Atari operations hope to separate from the ‘structural financial encumbrances’ of its French parent holding business, Atari SA.

As an alternative it hopes to secure independent capital for future growth, primarily in the locations of digital and mobile games.

In a statement, Atari stated that within the subsequent 90-120 days, the companies count on to effectuate a sale of all, or substantially all, of their assets in a ‘sale cost-free and clear’ under section 363 of the Bankruptcy Code, or to confirm plans of reorganization that accomplish substantially the same outcome.

These assets incorporate not only a single of the most extensively recognized brand logos, but also legendary game titles such as Pong, Asteroids, Centipede, Missile Command, Battlezone and Tempest.

In a statement from Atari SA, it said the company is at the moment profitable on an operating basis and had been paying off debt. Nevertheless, as its major shareholder and sole lender, BlueBay, has been unable to discover a buyer for its stake in Atari, this led to the company being ‘starved for funds and unable to finance its continued growth’

Arcade game pioneer

Founded in 1972, American video game and property computer company Atari Inc, was noticed as a pioneer in arcade games, house video game consoles and residence computers.

From the 1970s to the mid-1980s, Atari Inc’s games such as tennis sports game Pong and the hugely popular Atari 2600 console, helped define the computer entertainment sector and helped propel the firm into the limelight.

Parent organization Infogrames completed its takeover of Atari in 2008 and soon immediately after renamed itself Atari SA.

Enterprise to continue during bankruptcy?

A business spokesman said the Chapter 11 process is the most ‘strategic’ selection for Atari’s US operations, as they look to preserve their ‘inherent value’ and unlock revenue potential ‘unrealized although below the handle of Atari SA’.  During this period, the organization expects to conduct its normal company operations.

The US firms are also looking for approval to obtain $ five.25 million from a single or far more funds managed by Tenor Capital Management, to allow them to carry on company throughout the bankruptcy.

[Images via videogamehistory & atari-forum]

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