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January 22, 2013

Atari US files for bankruptcy protection to separate from French parent

The company expects to complete the sale of assets in the next 90 to 120 days.

By CBR Staff Writer

Atari has filed for bankruptcy protection in US and France in a bid to separate from its French parent and secure independent capital for future growth.

New York-based Atari Inc as well as affiliates Atari Interactive, Humongous and California US Holdings, filed for bankruptcy protection in the US Bankruptcy Court for the Southern District of New York.

The company has also filed bankruptcy before the French courts, under Book 6 of the French Commercial Code.

The companies expect to complete the sale of their assets in the next 90 to 120 days either through section 363 of the Bankruptcy Code or through a reorganisation plan.

The assets to be sold include games such as Pong, Asteroids, Centipede, Missile Command, Battlezone, Tempest, Test Drive, Backyard Sports and Humongous.

Atari’s US operations have shifted their business from traditional retail games to digital games and reported annual profits in 2011 and 2012.

"The Chapter 11 process constitutes the most strategic option for Atari’s U.S. operations, as they look to preserve their inherent value and unlock revenue potential unrealized while under the control of Atari S.A," said Atari.

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"During this period, the company expects to conduct its normal business operations," the company said.

The companies are also planning to secure a $5.25m bankruptcy financing package from one or more funds managed by Tenor Capital Management.

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