When troubled publisher THQ announced that it was filing for chapter 11 bankruptcy late last year, the company stood to get off relatively easy if the “stalking horse” bid from private equity firm Clearlake Capital Group was allowed to go through.
Unfortunately for THQ, it won’t.
Yesterday, we reported that the companies THQ owes money to – Wilmington Trust, WWE, Silverback Asset Management, Mattel and Viacom – weren’t happy with the proposed sale, and had individually filed objections.
If the sale went through, it would have allowed THQ to essentially maintain control of its property, and keep its management staff largely intact. For more on that, see our previous report.
In light of the filings, a hearing was held yesterday to determine whether or not the sale of THQ’s assets to Clearlake Capital Group was allowed to go through, and now US bankruptcy judge Mary F. Walrath has sided with the creditors, Business Week reports.
“I have problems concluding that the pre-petition sale process was fulsome,” Walrath told lawyers at the hearing, according to Business Week. The judge went on to note that THQ “‘id not even put out to the public that it was for sale’ until potential buyers signed non-disclosure agreements.”
Another hearing has reportedly been scheduled for Monday, January 7.
The news is followed by a report from blog Distressed Debt Investing which claims that five investors are eyeballing THQ and its assets should the sale period be extended. Among those potential investors is Warner Bros., apparently.
“Lawyers for Warner Brothers states they have team ready to complete due diligence if more time is allowed,” Distressed Debt Investing said in a Twitter post.