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JoWooD Declares Bankruptcy

| 11 Jan 2011 16:55
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Austrian game publisher JoWooD Entertainment has filed for bankruptcy but says it hopes to get its house in order fairly quickly and become a going concern once again.

JoWooD may not be a gamer household name like Activision or EA, but it's been around for awhile and has a fairly decent library of published titles to its credit. It specializes in games that might otherwise not reach an interested audience, like the Gothic, SpellForce and Söldner series; my first JoWooD game was the great Arx Fatalis, which earned it a special place in my heart that remains to this day.

The company has been struggling financially for years, however, and on Friday the the hammer finally fell as it acknowledged that "all efforts towards restructuring of capitalization concerning outside capital as well as equity capital had to be considered as failed" and that it was thus forced to declare insolvency.

Despite the bad news, JoWooD said in a statement that it believed negotiations with creditors and possible investors could be wrapped up within 90 days, ensuring the continued operation of the company. Assisting in that regard may be a lawsuit filed by JoWooD against Koch Media GmbH for €2.36 million ($3.06 million) plus interest, resulting from an undervalued purchase of JoWooD shares by Koch.

"With a view to JoWooD's strained financial situation and based on corporate law considerations, the company's management board today decided to file the law suit in the company's and its shareholders' interest," the company said. It also noted that a decision will only be reached "after tedious proceedings that could last for several years," a statement which GamesIndustry suggested could be a ploy to encourage Koch to settle.

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