Atari SA Hops the Bankruptcy Train

[Andy Chalk]

Atari SA Hops the Bankruptcy Train

Atari Inc.'s parent company is following it into insolvency.

The twisted history of Atari makes telling the players a bit of a chore even with a scorecard, but for the sake of simplicity we'll break it down like this: Atari Inc., based in the U.S., is a wholly-owned subsidiary of Atari SA, the French company formerly known as Infogrames. It's a complicated corporate relationship, but those complexities may soon be irrelevant; Atari Inc. filed for Chapter 11 bankruptcy yesterday [http://www.escapistmagazine.com/news/view/121617-Atari-Inc-Files-for-Bankruptcy] and today, Atari SA followed it down.

Atari SA said in a statement that BlueBay Asset Management, its "main shareholder and sole lender," announced its intention to offload its interest in the company back in October 2010 but, "because of the French listing, limited free float, the complicated nature of the company's capital structure and the difficult economic and sector operating environment," it has been unable to find anyone willing to assume control. With a €21 million ($37 million) BlueBay credit facility coming due on March 31, company management decided it had no choice but to follow Atari Inc. and file for legal protections in France under Book 6 of the French Commercial Code, the French equivalent of Chapter 11 bankruptcy.

"In light of the current situation with BlueBay, we have decided to take what we think is the best decision to protect the company and its shareholders," Atari CEO Jim Wilson said in a statement. "Through these ongoing procedures, and especially the auction process in the U.S., we will seek to maximize the proceeds in the best interest of the company and all of its shareholders."

The statement noted that Atari SA has also filed a request to suspend the trading of its shares on the Euronext Paris market.

Source: Atari [http://www.atari.com/sites/default/files/ATARI_20130121_EN.pdf]


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[Covarr]

The important question is, what's happening to the old Humongous Entertainment franchises? What about Pajama Sam? Ron Gilbert, or someone at Telltale, y'all better get on this. The world could use a Pajama Sam 5.

P.S. Thanks

 

[Albino Boo]

What on earth is chapter 11 bankruptcy? The US doesn't span the entire globe you know, neither does its legal system (except as an eternal source of hilarity in legal circles), so most people won't know about that.

Chapter 11 is when a company is effectively bankrupt and is given legal protection from its creditors in an attempt to either reorganise or to find new owners but within oversight of a court. Versions of chapter 11 do effectivity cover the globe because the source of it is the English common law system and is therefore found in most parts of the former British Empire. Most Western countries have versions of the law with either, a court appointed 3rd party taking over the running of the company or the current owners having control but within the oversight of a court.

 

[Scars Unseen]

What on earth is chapter 11 bankruptcy? The US doesn't span the entire globe you know, neither does its legal system (except as an eternal source of hilarity in legal circles), so most people won't know about that.

http://en.wikipedia.org/wiki/Chapter_11,_Title_11,_United_States_Code

This is probably the most relevant passage for the purposes of this thread:

Chapter 11 in general

When a business is unable to service its debt or pay its creditors, the business or its creditors can file with a federal bankruptcy court for protection under either Chapter 7 or Chapter 11.

In Chapter 7, the business ceases operations, a trustee sells all of its assets, and then distributes the proceeds to its creditors. Any residual amount is returned to the owners of the company. In Chapter 11, in most instances the debtor remains in control of its business operations as a debtor in possession, and is subject to the oversight and jurisdiction of the court.

 

[Therumancer]

What on earth is chapter 11 bankruptcy? The US doesn't span the entire globe you know, neither does its legal system (except as an eternal source of hilarity in legal circles), so most people won't know about that.

Actually most people do know about that as the US is pretty much the focus of global business and it's largest market. This is slowly changing since we haven't been keeping our interests in line, but basically if you do any kind of large scale business your going to have some basic knowlege of "Chapter 11" and similar laws, most of which were based off of British common laws (as others have explained in more detail). As the article explains France also has it's own parallel that does roughly the same thing.

As far as the US legal system not spanning the entire globe, that's been debatable. In general US citizens are under a crazy amount of protection in any country that the US maintains an Embassy by agreement. More so than you see for citizens of other nations. One of the benefits of being the dominant global super power (though likely to be one of several super powers again before too long). Those countries the US doesn't maintain embassies with usually tend to be pretty backwards and in a degree of fear of potential US military intervention if we get ticked off enough. Though the US does advise citizens not to visit those countries where it can't insure a high degree of protection as a matter of policy. In actual practice your typical American in trouble screaming about their rights might not know the actual source of them, but they do generally have rights guaranteed by agreement with the US. It's not diplomatic immunity or anything close to that, but in general when it comes to fairly big crimes most countries need the permission of the US embassy to pursue them within their own legal system. Unless it's something high profile, and beyond the pale, a murder, or whatever in most cases a US citizen in trouble will be kicked out of a country rather than being put through their legal system, though like everything there are exceptions. One of the protections the US gives is that your generally entitled to a trial under US principles and laws, and intristically possess certain human rights, and it all gets dealt with diplomatically.

For a while now the US has been largely unaggressive and hasn't been pursueing it's own interests as much as it used to, so your seeing more things happen that confuse this kind of an issue. It's a topic of debate in some circles. More US citizens have faced foreign justice in recent years apparently, and that might meet with some mockery due to the assumptions of US travellers and how things were run, but ultimatly it happens because the US allows it to happen in an attempt to be more diplomatic, rather than pushing things as much as it normally would.


Truthfully though, you could just say you don't know what something is, rather than engaging in US bashing, and making derrogatory assertsions about the perception of the US legal system given how we've pushed things in the past. Yes, the US hasn't been pursueing it's own interests as assertively as it used to, we all know this. Mockery because of it doesn't exactly encourage more restrained and diplomacy on the subject which we've been trying to exercise in recent years.

 

[Therumancer]

To be honest I'm not a huge fan of Atari anymore, given their mismanagement of some of their computer game brands and such I'm not paticularly surprised that they are in trouble (again). To be honest I think they kind of need to give up the ghost. They are one of the defining companies of computers and video gaming, but really I think they long ago lost the right mindset needed to either compete or make customers happy. Given their EA-like behavior of chewing up and spitting out companies like "Troika" at one time they are hardly sympathetic to me. It's like EA or Activision facing Chapter 11, it might not be a good thing in some vague, big-picture kind of way, but it's not a company I could bring myself to sympathize with.

The biggest question I have to ask though, is "where is the sword?".

Back during the age of the Atari 2600, Atari ran a contest involving a set of cartridges called "Swordquest", the series/contest was never completed but the idea was each phase of the contest would give an epic prize to the person who could prove beating the game first (if I remember). For the first phase they gave the winner this jeweled talisman based on one from the game, which was worth a lot of money, the goober that won it apparently melted the thing down and sold it's component parts though (grrr). Atari never did do the next phase of the contest but had made the prize for it, a jeweled sword. Since it's creation I've heard some speculation of where it was, ranging from the CEO's office to them having lost it somehow, and I've never hard a solid answer or seen them show it off. Did they melt it down due to financial trouble (Grr), or is it one of the assets that might go up for auction if they are forced to close, or what?

I doubt anyone can answer that unless some Atari exec logs on, and can get past me not liking Atari much nowadays, but it is an interesting question. Perhaps if Atari goes down for the count we'll finally get the answer.

 

[Nick Pirce]

So "Atari" may be filing for bankruptcy but Atari has been in video-game heaven for some time now

 

[gigastar]

Im still amazed that Atari took this long to collapse completely.

Fortunately thats the only remarkable thing about them theese days.

 

[Farther than stars]

Man... This feels like the end of an era. Atari has always been there, ever since I was growing up. I mean, they made "Pong", the first video game. Then there's Pac-Man on the Atari 2600. They brought Dragon Ball Z to video games too... It's just, it seems kinda impossible that this should happen. It's like saying that McDonald's has gone bankrupt.

What on earth is chapter 11 bankruptcy? The US doesn't span the entire globe you know, neither does its legal system (except as an eternal source of hilarity in legal circles), so most people won't know about that.

Actually, the U.S. legal system as a whole is pretty sophisticated, being based on both Anglo-Saxon and Ancient Roman legal traditions. It was also specifically designed that way from the outset and has always been democratically amendable, as opposed to European legal systems which developed over time through infighting in the royal courts.
Now, if you want to see a legal system that is truly a mess, you should take a look at the British legal system, which - without a constitution and being co-founded on legal precedents - is like navigating a gigantic maze.
On a side note, if you don't know what Chapter 11 bankruptcy is, how do you know what goes around in legal circles?

 

[Strazdas]

Kill it, kill it with fire.
I hope the creditors will tear the company thats bearing Atari name now (because its not atari, its just a name) to shreads and we will never see it again.