Atari Inc.’s parent company is following it into insolvency.
The twisted history of Atari makes telling the players a bit of a chore even with a scorecard, but for the sake of simplicity we’ll break it down like this: Atari Inc., based in the U.S., is a wholly-owned subsidiary of Atari SA, the French company formerly known as Infogrames. It’s a complicated corporate relationship, but those complexities may soon be irrelevant; Atari Inc. filed for Chapter 11 bankruptcy yesterday and today, Atari SA followed it down.
Atari SA said in a statement that BlueBay Asset Management, its “main shareholder and sole lender,” announced its intention to offload its interest in the company back in October 2010 but, “because of the French listing, limited free float, the complicated nature of the company’s capital structure and the difficult economic and sector operating environment,” it has been unable to find anyone willing to assume control. With a €21 million ($37 million) BlueBay credit facility coming due on March 31, company management decided it had no choice but to follow Atari Inc. and file for legal protections in France under Book 6 of the French Commercial Code, the French equivalent of Chapter 11 bankruptcy.
“In light of the current situation with BlueBay, we have decided to take what we think is the best decision to protect the company and its shareholders,” Atari CEO Jim Wilson said in a statement. “Through these ongoing procedures, and especially the auction process in the U.S., we will seek to maximize the proceeds in the best interest of the company and all of its shareholders.”
The statement noted that Atari SA has also filed a request to suspend the trading of its shares on the Euronext Paris market.