Chapter 7 allows a company to eliminate most of its debt in exchange for giving up property not protected by exemption laws.
According to the announcement, the New York-based company had assets of only $47.3 million and liabilities of $145.3 million at the start of July. The company will be liquidated. Last week it fired nearly 600 employees and closed its offices in New York, Austin (Texas), and Manchester in the UK.
Acclaim was founded in 1987 and developed games for a number of platforms including Sony’s PlayStation2, Microsoft’s Xbox, Nintendo’s GameCube and Game Boy Advance, and to a lesser extent the personal computer. It developed its games internally in its six software development studios located in the US and the UK, although it also sometimes used third parties.
For the last fiscal year ending March 31, Acclaim posted a net loss of $56.4 million, down from a net loss of $84.8 million. Sales declined to $142.7 million as compared to $210.1 million for the previous year.
In July it warned the market that it faced bankruptcy unless it could renegotiate a new $65m credit facility, and then on August 23, it revealed that its credit facility with primary lender GMAC Commercial Finance LLC had expired. Negotiations failed to locate a new lender.
The writing was on the wall and Nasdaq announced delisting proceedings had been initiated due to its inability to meet the minimum market capitalization for continued listing requirements of the Nasdaq Small Cap Market.
