THQ Files for Bankruptcy, Sells Assets to Clearlake Capital Group

After dropping nearly 12 percent today, THQ

has announced that it has filed for bankruptcy. The company has secured an asset purchase agreement with Clearlake Capital Group "to acquire substantially all of the assets of THQ's operating business, including THQ's four owned studios and games in development."

THQ, which produces the Saints Row franchise, reportedly owes more than $100 million to creditors. When the company announced that it would sell Saints Row: The Third and other games via the charity website HumbleBundle.com, many wondered if this was a desperate attempt to earn money. Others speculated that it was a marketing gimmick. Based on today's developments, it seems that the first prediction may have been correct. "The sale and filing are necessary next steps to complete THQ's transformation and position the company for the future, as we remain confident in our existing pipeline of games, the strength of our studios and THQ's deep bench of talent," Brian Farrell, Chairman and CEO of THQ, said in a

. "We are grateful to our outstanding team of employees, partners and suppliers who have worked with us through this transition. We are pleased to have attracted a strong financial partner for our business, and we hope to complete the sale swiftly to make the process as seamless as possible." THQ has been struggling to stay afloat this year and the last, losing more than 97 percent of its value since December 20, 2012. In March 2011, Wedbush Securities analyst Michael Pachter

about one of the more significant sell-offs to hit THQ. "I think that THQ's share decline in excess of the overall market decline was caused solely by mediocre reviews for Homefront," said Pachter. "The game is the most expensive one produced in THQ's history, had the greatest pre-launch marketing budget in company history, and was widely viewed as the centerpiece in the company's core games strategy." THQ showed signs of hope in October 2011 when it climbed roughly 15 percent. Those gains were reversed in the following month, however, as THQ plunged another 18 percent. The firm had another recovery in April 2012, rising 25 percent. Those gains were short-lived, however. THQ plummeted more than 14 percent in May and dropped another four percent in June. In July, THQ lost more than 12 percent of its value, followed by a four percent drop in August and a 22 percent drop in September. In October, THQ declined by 20 percent. Last month THQ shed another 49 percent of its value. Despite the filing and asset sale, THQ management said that the company does not anticipate any layoffs. Production on the fourth Saints Row game is expected to proceed.