Game over? Atari branch in US files for bankruptcy
NEARLY three decades after Atari closed the doors on its first iteration, the video game pioneer is trying another reinvention. It just had to file for bankruptcy first.
The company's US subsidiary, Atari Interactive, filed for Chapter 11 protection on Monday as part of an effort to cleave itself from its French parent, Atari SA.
The move, made in the Bankruptcy Court for the Southern District of New York, is meant to pave the way for a sale of the division, including its distinctive logo and rights to the staples from the childhoods of many members of Generation X: Pong, Asteroids and Centipede, among other games. The company will continue to operate normally during the bankruptcy case.
If successful, the move will be the latest chapter for a company that introduced video games to millions by letting them thwack a crude virtual ball back and forth across a television screen.
Atari first faltered during the bursting of the video game bubble in 1983 and has made periodic efforts to remake itself since. Its latest phase is more in keeping with the times: the company now focuses on producing mobile and online games, including remakes of its top titles for iOS and Android devices.
Beginning in 2000, the company began its absorption into Infogrames, a French video game producer that in 2008 adopted the name of its prominent subsidiary. But Atari SA, as the newly rechristened company is now known, has struggled financially. Several weeks ago, the company lost access to new money from its primary lender, BlueBay Asset Management.
Atari SA's shares have tumbled nearly 49 per cent over the past 12 months, closing on Monday at just 86 euro cents.
Now, Atari is seeking to sell its US operations through a 363 sale, allowing a buyer to gain control of the company's core assets free of any liabilities.
"In light of the current situation with BlueBay, we have decided to take what we think is the best decision to protect the company and its shareholders," Jim Wilson, Atari SA's chief executive, said. "Through these ongoing procedures, and especially the auction process in the US, we will seek to maximise the proceeds in the best interest of the company and all of its shareholders."
In a court filing, Atari listed having less than $50 million in assets and less than $500,000 in liabilities. It has obtained about $5.25 million in bankruptcy financing from Tenor Capital Management.