Los Angeles Business Journal

THQ Assets Up for Auction

By Natalie Jarvey Tuesday, January 22, 2013

Video game titles and development studios from bankrupt publisher THQ could have a new home by the end of the day Tuesday after the auction of the company’s assets.

Bidders had until Tuesday to submit offers for assets such as the “Saints Row” and “Company of Heroes” franchises. If bids for the company’s individual assets total more than bids for the company as a whole, a piecemeal auction will take place later in the day. All sales are expected to close by Thursday after THQ seeks court approval.

Prior to the sale, a number of bidders expressed interest in THQ, including Burbank film studio and video game developer Warner Bros. and Redwood City publisher Electronic Arts Inc.

The auction hit a bit of a snag, however, on the sale of its upcoming game “South Park: The Stick of Truth,” based on the popular Comedy Central show.

South Park Digital Studios, the creator of the show and owner of the intellectual property, filed a complaint with the U.S. Bankruptcy Court on Jan. 18 claiming that a sale cannot be completed unless it gives its approval.

The company says its original contract with THQ lays out this stipulation along with the right to buy the game back from THQ. Additionally, South Park claims that THQ owes it $2.27 million.

THQ responded on Jan. 21, saying that it will work to resolve the issue before the sale, but could go through with the sale of “certain rights” for the game without South Park’s approval. The publisher also asserts that it does not owe South Park any money.

Clearlake Capital Group LP currently holds THQ’s assets. The Santa Monica private equity firm bought the assets as part of a $60 million stalking horse bid that included a $10 million promissory note to the company’s creditors.

But the case’s bankruptcy trustee and a group of creditors who believed the company’s assets were worth more, convinced the bankruptcy judge to stop the deal and allow for more time for bidders to emerge.

The bankruptcy and auction proceedings appear to favor a situation in which one company would buy the whole of THQ instead of disassembling it.