Atari U.S. Operations Voluntarily File for Chapter 11 Bankruptcy Protection in Effort to Split from French Parent Company

Atari Inc.; Atari Interactive, Inc; California U.S. Holdings, Inc.; and Humongous, Inc. voluntarily filed for chapter 11 bankruptcy protection on Sunday in New York. According to the company’s press release announcing the bankruptcy filing, “the U.S.-based Atari operations seek to [utilize the bankruptcy filing to] separate from the structural financial encumbrances of their French parent holding company, Atari S.A. (formerly Infogrames S.A.) and secure independent capital for future growth, primarily in the areas of digital and mobile games.” Specifically, according to the same press release, Atari is planning a section 363 sale of all of its U.S. assets:

Within the next 90-120 days, the Companies expect to effectuate a sale of all, or substantially all, of their assets in a “sale free and clear” under section 363 of the Bankruptcy Code or to confirm plans of reorganization that accomplish substantially the same result. These assets include not only one of the most widely recognized brand logos, which is familiar to 90% of Americans, according to a recent survey, but also legendary game titles including Pong®, Asteroids®, Centipede®, Missile Command®, Battlezone® and Tempest®. Other recognized brands include Test Drive®, Backyard Sports® and Humongous®.

Atari will seek bankruptcy court approval to borrow up to $5.25 million from Tenor Capital Management (or its affiliates) pursuant to a debtor-in-possession financing facility.  Atari is represented in the bankruptcy cases by Peter S. Partee, Sr. and Michael P. Richman of Hunton & Williams LLP.

Update 1 (12:35 a.m., Jan. 21): Atari Seeks Authority to Pay Pre-Petition Claims of Four Outside Game Developers, Details Games

Update 2 (1:00 a.m., Jan. 21): Atari’s 15 Largest Unsecured Creditors

This post will be updated as additional bankruptcy court filings are made. In the interim, linked below are free copies of various Atari bankruptcy court filings which we’ve posted to our blog. Click on the links to read free embedded copies and/or download PDF copies for yourself.

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