Just days after lenders filed a formal complaint against THQ, claiming they wanted THQ's assets and IPs sold off piecemeal comes the decision from the Delaware courts. Judge Mary Walrath ruled for the THQ's lender plaintiffs, agreeing with them that their quick bankruptcy sale did indeed not give other bidders enough time to participate.
According to Distressed Debt Investing, the lenders then announced this morning that they would hear bids for individual titles, thus likely generating more money for the company as a whole than their $60 million to Clearlake would have.
“I have problems concluding that the pre-petition sale process was fulsome,” Walrath told lawyers at the hearing, according to Bloomberg. She said THQ “did not even put out to the public that it was for sale” until potential buyers signed non-disclosure agreements.
As Venturebeat noted, just about everyone knew THQ was or would be up for sale due to their financial struggles over the past year, but no one put any known bids in at that time. Even Electronic Arts and Ubisoft circled like vultures as they checked out THQ's assets a few months ago. But the courts did not appear to take that into account.
Walrath said that 10 potential buyers contacted THQ after hearing about the bankruptcy sale with Clearlake, proof in her eyes that THQ didn't try hard enough to find bidders.
Clearlake proposed extending the January 10th sale by five more days, but the judge didn't go for it.
“I am not convinced that we are under the gun to have a sale process by the 15th,” Walrath said, asking that Clearlake work with other interested parties to extend the timing further. As the court proceeding will reconvene later today, a final ruling on just how much more time the lenders receive should be decided by tomorrow.