Atari US files for bankruptcy
Atari’s US operation is seeking a split from its debt-laden French parent company in a bid to save the business. Once complete, Atari US will take the company private and then seek a buyer for its mobile and digital games business.
The LA Times broke the story on the move over the weekend, and the company has since confirmed the story in a statement. New York-based Atari Inc and three affiliates (Atari Interactive, Humungous Inc and California US Holdings Inc) asked to be jointly administered today in order to secure independence.
“The Chapter 11 process constitutes the most strategic option for Atari’s U.S. operations, as they look to preserve their inherent value and unlock revenue potential unrealized while under the control of Atari SA,” says the statement. “During this period, the company expects to conduct its normal business operations.”
The LA Times’ story adds that if Chapter 11 is successfully completed, the US business could “reemerge with its own resources and little or no debt” to its creditor, London-based financial company Blue Bay. It is believed that chief executive Jim Wilson will seek backers to help him retain control of the company, though the new Atari US could be sold to a buyer either in whole or in pieces. Atari’s French businesses would now likely seek legal protection to find a buyer or be dissolved.