Chapter 11 Bankruptcy for Beloved Video Game Company Atari – Will Atari Become Space Invaders or Defenders?
Atari Interactive, Inc. filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code on January 21, 2013 in the United States Bankruptcy Court for the Southern District of New York. In 2000, the iconic game developer came under the wing of French video game concern, Infogrames–which later adopted the more familiar name of its subsidiary to become known as Atari, S.A.
However, Atari, S.A. has become financially distressed. In fact, over the last year, its stock has given back almost half of its value. Weeks ago, the French company’s situation worsened when its secured lender shut off its access to cash. The early indications are that Atari, S.A. will seek to sell its American subsidiary, either through a sale under section 363 of the Bankruptcy Code or through a Chapter 11 Plan. For a generation of gamers and technophiles, the Atari brand is recognized–not just for its kitschy, “can people ever actually played Centipede” value–but also as having provided considerable contributions to the evolution of modern entertainment. Thus, in addition to the value of its intellectual property and its value as an enterprise, Atari also has considerable good will. That mix should serve to generate some interest at the time of sale.
Atari is represented by Hunton & Williams, LLP and its bankruptcy case is docketed at 13-10176.
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