Three weeks ago, THQ, the owners of the WWE video game franchise, finally filed for bankruptcy after several years of huge money losses and was attempting to sell all their assets to a "stalking horse bidder", Clearlake Capital Group LP, for $60 million.
Upon hearing the news, Vince McMahon was apparently "furious", an understandable reaction when THQ still owes WWE $45 million on the remainder of their existing multi-year agreement.
WWE wasn't the only creditor upset with THQ's fast-track bankruptcy sale. Indeed, a formal objection to the proposed sale process was made on Jan. 2nd by a group of lenders alleging that the bankruptcy was orchestrated to financially benefit the company’s newest executives (President Jason Rubin and Chief Strategy Officer Jason Kay) and their friends at the financial firm (Centerview Partners) they had hired to sell THQ.
Here's a summary of the main complaints made over how the sale was being handled:
"In a filing, the lenders said that the timing of the sale is too short to let interested parties make rival bids. Those potential bidders wouldn’t have enough time to kick the tires on THQ’s assets. It also says that THQ should allow bidders to offer bids for some of THQ’s game properties, rather than buying all of them."
Common sense suggests that more money could easily be made by selling THQ's titles separately than forcing parties interested in some of their game licenses to buy the whole company to obtain them.
So it was unsurprising then that on Friday, Jan. 4th U.S. Bankruptcy Judge Mary F. Walrath refused THQ's request to hold an auction for the whole company on Jan. 9th, just 21 days after seeking bankruptcy protection. She told the parties involved to negotiate over the weekend to determine how to proceed.
Thankfully an agreement was reached for a revised, slightly longer bankruptcy sale process, which would allow for THQ's assets like the WWE video game license to be sold separately, and approved at another hearing presided over by Judge Walrath yesterday:
"The revised sale process will allow potential buyers to make "piecemeal bids" for individual assets and video-game titles, a change creditors were pushing for, [THQ attorney Jeffrey C.] Krause told Walrath at the hearing."
Video game publishers known to be interested in THQ's titles include Electronic Arts Inc. (EA), Warner Bros. Entertainment Inc. and Ubisoft.
WWE will be hoping that the auction on Jan. 22nd for the rights to their video game series will lead to a bidding war between two or more companies with the winner offering better terms to them than their old deal with THQ. We'll let you know who lands the winning offer, Cagesiders, in two weeks time.