Atari Declares Bankruptcy, Actually Has Plan to Save Itself

Atari Inc., the New York interactive entertainment and licensing company with a portfolio of more than 200 videogames, Monday filed for Chapter 11 bankruptcy protection with plans to sell all its assets.

The company, a videogame pioneer that produces titles including "Pong," "Asteroids," "Centipede" and "Battlezone," said its bankruptcy petition is an effort to separate the company from its French parent and secure independent capital.

Atari is aiming to complete the sale of its assets in the next 90 to 120 days, it said, either through the section of the bankruptcy code that governs standalone sales or through a plan of reorganization. The company has lined up a $5.25 million bankruptcy financing package from funds managed by Tenor Capital Management of Manhattan.

The company's parent is Atari SA of Paris, formerly Infogrames SA. Founded in 1972, Atari SA describes itself as the "original innovator of video gaming," according to its website

In Monday's statement, Atari Inc. said it has shifted its business from "traditional retail games" to digital games and licensing, with an "increased focus on developing mobile games based on some of Atari's most iconic and enduring franchises." The company recently launched titles for iOS and Android mobile platforms, such as "Atari Greatest Hits."

In its petition, filed in Manhattan, Atari cited assets of $1 million to $10 million and debts of $10 million to $50 million. The company filed alongside three affiliates--Atari Interactive Inc., Humongous Inc. and California U.S. Holdings Inc.—and is being represented by attorneys from Hunton & Williams LLP.

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It's a different Atari. And the branch that is declaring bankruptcy is actually profitable, they're doing this so they can break away from their failing French parent company.

 

Attempts to find a buyer for Atari has failed. It's assets will go up for auction in July, IPs include Rollercoaster Tycoon, Test Drive, and Total Annihilation.