The U.S. branch of Atari has filed for Chapter 11 bankruptcy, as a means of separating its financials from its French parent holding company Atari S.A., and in turn securing a fresh start.
Chapter 11 bankruptcy is often used to allow large companies to restructure their business affairs, although it is usually only put into motion after careful consideration of alternative options.
Atari Inc. and its other U.S.-based companies, including Atari Interactive Inc., Humongous, Inc. and California US Holdings, are looking to sell all of their assets within the next 90-120 days, as the collective looks to shift business from traditional retail games to digital and licensing.
Assets due to be sold include Pong, Asteroids, Centipede, Missile Command, Battlezone, Tempest, Test Drive, Backyard Sports and Humongous.
Atari was bought out by French developer Infogrames back in 2008, and in 2009 Infogrames changed its name to Atari S.A., as it looked to make use of the Atari name.
However, the U.S. branch of Atari now wants to separate itself from Atari S.A., as it says that its new focus on digital games has turned it into "a growth engine," yet this has gone "unrealized while under the control of Atari S.A."
This move will allow Atari to pull away from "the structural financial encumbrances" of its parent company, it said in a statement.
As part of the filing, Atari is looking to obtain $5.25 million in debtor-in-possession financing from financial investment company Tenor Capital Management.