The iconic video game company Atari, which brought us such memorable games as "Pong," "Tetris," and "Centipede," has filed for Chapter 11 bankruptcy in an attempt to protect itself from its parent company's debt problems.
In a statement
released Monday, Atari Inc., Atari Interactive Inc., Humongous Inc., and California U.S. Holdings Inc. announced their intentions to "secure independent capital for future growth, primarily in the areas of digital and mobile games" by seeking "to separate from the structural financial encumbrances of their French parent holding company, Atari S.A., formerly Infogrames S.A."
The sentiment was shared by Atari CEO Jim Wilson.
"In light of the current situation . . . we have decided to take what we think is the best decision to protect the company and its shareholders," Wilson said in in announcing the filings.
Over the next 90 to 120 days, the companies plan to sell or restructure all of their assets, including brands and logos, as part of the bankruptcy.
Similarly, the company's European operations have also filed bankruptcy procedures in French courts, according to Atari S.A.
Founded in 1972, the company has changed owners several times.
Presently, Atari Inc. has only 40 employees in the United States, reported PC World, which added that Atari S.A., the French holding company, had not been profitable for about a decade prior to 2010.
In recent years, Atari Inc.'s business model has changed, shifting from retail games to digital games for Apple's iOS and Android. Atari Inc.'s recently released games for mobile platforms include Atari® Greatest Hits, Outlaw™, Breakout®, and Asteroids Gunner®.
Revenues generated from digital downloads and advertising have, according to Atari Inc.'s press release, "become a growth engine for Atari S.A., which in turn has reported consecutive annual profits in 2011 and 2012."
During the Chapter 11 proceedings, the parties will "conduct business as usual" according to the release, with Robert Mattes remaining CFO of the U.S. entities.
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