US unit of Atari files for Chapter 11 bankruptcy: report
21 Jan 2013
The US unit of iconic computer games publisher and developer Atari Inc, best known for creating games like Dragon Ball and Asteroid and its home game consoles, yesterday filed for Chapter 11 bankruptcy in New York, the L.A. Times yesterday reported, citing a knowledgeable person not authorised to discuss the matter privately.
The report said that the US arm and its three affiliates filed for bankruptcy in an effort to ''break free'' from their French parent company, Atari S.A, which is believed to be in debt.
The US unit hopes to break the American business free from French parent and find a buyer in the next few months to take the company private, the report added.
Founded in 1972, Atari owns and or manages a portfolio of more than 200 games and franchises, including world renowned brands like Asteroids, Centipede, Missile Command, Pong, Test Drive, Backyard Sports and RollerCoaster Tycoon.
The New York-based company also develops and distributes interactive entertainment for video game consoles from Microsoft, Nintendo and Sony.
Its parent Atari SA is an international French holding company headquartered in Paris. It was originally called Infogrames Entertainment, SA. Its subsidiaries include Atari London Studio, Eden Games and Atari Interactive Inc.
In 2008, it was acquired by French company Infogrames, which changed its name to Atari S.A. and acquired all the gaming pioneer's American assets.
The L.A. Times reported that Atari Inc's growth potential has been hampered by its dependance on London financial company BlueBay Asset management for cash, and was left without cash reserves to release games that are currently in development after a $28 million credit facility lapsed on last month.
The report said that it is not yet clear who might step up to buy Atari Inc, but it is possible that the company could be sold in whole or in pieces.
Atari's remaining French businesses would probably seek legal protection to find a buyer or dissolve in that country, it added.
