Various Japanese news outlets are reporting that Atlus Co. Ltd. holding company Index Holdings, bordering on banruptcy, has just applied for what is legally known as 'rehabilitation'.
The financial and legal status of Index was put into question early this year when reports came out the company was under investigation by the Securities and Exchange Surveillance Commission for fraudulent bookkeeping practices.
Atlus is a prolific developer and publisher of quirky, obscure and interesting Japanese games. Its extensive library includes Persona, Megami Tensei, Catherine, Etrian Odyssey, Trauma Center, Choro Q, Snowboard Kids, and Growlanser.
Index released an official press release revealing legal details and acknowledging Atlus, its games division, as the most valuable aspect of their business. Index indicated its intent in finding another company to partner or purchase this segment of their business.
Index itself has been around since 1995 and has been a part of the Tokyo stock exchange since 2004.
In real life terms, civil rehabilitation will result in Index reorganizing as a company. The company will continue operations with a combination of some people who are already in management and investor positions in the company.
We have yet to verify what these changes will mean for Atlus Co. Ltd., as well as its California-based subsidiary, Atlus USA. It's also still unclear how this will affect games still in development, such as the upcoming Shin Megami Tensei x Fire Emblem crossover for the Wii U.
Whatever the final outcome, this looks like it will be a serious blow to fans. Atlus USA has garnered a reputation for being the uncommon Western game company still actively localizing niche Japanese titles like Catherine. It's possible that Atlus may ramp down on such efforts for the rest of the year.
UPDATE: Atlus has confirmed in separate statements that the situation with Index has not affected operations. Upcoming releases such as Dragon's Crown and Shin Megami Tensei IV DLC will be coming out as scheduled.
Screenshot is from Shin Megami Tensei IV for 3DS.