Atari has filed for bankruptcy in the New York Bankruptcy Court and its assets will be sold off, according to GamesBeat. The company founded by Nolan Bushnell in 1972 will continue to operate during the bankruptcy proceedings.
Atari is comprised of several divisions including Atari Inc., Atari Interactive Inc., Humongous, Inc. and California US Holdings, Inc. Within the next three to four months, Atari plans to sell all of its assets in a sale free and clear under section 363 of the Bankruptcy Code. The assets include the Atari brand logo, and such iconic game franchises as Pong, Asteroids, Centipede, Missile Command, Battlezone, Tempest, Test Drive, and Backyard Sports – among others.
Atari hopes that this bankruptcy filing will separate the U.S. division from its European owner Atari S.A. (formerly Infogrames S.A.).
"With this move, the U.S.-based Atari operations seek 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," the company said in a press release.
Atari is asking the court to approve $5.25 million in debtor-in-possession financing from one or more funds managed by Tenor Capital Management, a firm specializing in convertible arbitrage and special situations. Peter S. Partee, Sr. and Michael P. Richman of Hunton & Williams LLP serve as lead counsel in the bankruptcy filing.
We will have more on this story as it develops.