Objections Filed Against THQ’s Sale; Terms Said To Not Favor Creditors
THQ’s declaration of bankruptcy a couple of months ago was a very troubling and sad news. The company later announced plans of selling their assets to Clearlake Capital but new reports indicate that the sale may not go smoothly for THQ.
According to a report by Distressed Debt Investing, two objections have been filed in the case. The US Trustee overseeing the bankruptcy has complained that high reimbursement rates and short timing of the sale blocks other bidders from participating. The objection clearly highlighted that present proceedings went in favor of Clearlake and that was unfair.
THQ’s own creditor’s raised the second objection stating that the terms of the sale ensures that the company will be bought as a whole. This in turn will not allow the creditors to maximize their profits.
The committee of note holders stated:
Taken as a whole, the bidding procedures are designed specifically to ensure that Clearlake is the successful bidder and that the Debtors’ business will continue as a ‘going concern,’ whether or not such outcome would be in the best interests of the Debtors’ unsecured creditors and/or maximize the value of the Debtors’ estates.
We’ll know more when the court hearing begins tomorrow for the bidding procedures.