When a business gets into a dire financial situation, the company's directors may feel like there are no good options. However, in the history of the American economy, there are very few businesses that go throughout their existence without changes - sometimes significant changes.
For one California-based company, a big change is on the horizon. The business decision makers behind video game production company THQ Inc. recently decided to file for Chapter 11 bankruptcy. According to the initial reports, THQ is looking to sell all of their assets, and an investment group for has come forward with an initial bid of $60 million. Others bids could be forthcoming.
Many types of change can come with a company's decision to file for bankruptcy protection. Under Chapter 11, a company will usually look toward reorganizing their business model in order to streamline operations and come to terms with creditors on how to address business debt. Oftentimes, these parts of the process will play out while the company continues to remain in business in an attempt to turn a profit. For THQ, the initial indications are that current operations will continue while the company prepares to sell.
Although the video game maker has been responsible for designing and producing some hugely successful titles, it has not been able to maintain a competitive edge against some of the other, larger video game makers in the industry. This type of scenario can happen to any type of business, and sometimes the people responsible for deciding the best way forward may need to consider the options that a business bankruptcy provides. Doing so could ensure that the employees of the business keep their jobs.
Source: Bloomberg Businessweek, "Game maker THQ files for bankruptcy," Dec. 19, 2012