American company seeks to sever ties to French parent
The American wing of gaming company Atari is filing for bankruptcy and chapter 11 reorganization. The French parent company for Atari has hit hard times financially, and according to the L.A. Times, the US department wants out.
Atari chief executive Jim Wilson has made efforts to revive the company by focusing on digital content and the mobile market. Wilson also licensed out the Atari logo for consumer merchandizing, which now accounts for 17 percent of the company’s revenue. The gaming company still makes millions in profits, but overall revenue has dropped 34 percent in 2012 and 43 percent in 2011.
A source that cannot publicly speak about the company’s plans has stated the strategy is for the US portion of the company to declare bankruptcy and go private. French company Infogrames bought Atari and its assets from US toy manufacturer Hasbro in December 2000 and changed its name to Atari S.A. The cash flow within the company is reportedly tied to a London-based financial company, which makes things overly complicated for the American offices. The US wing is looking to sever ties and go it alone, without the debt of its European parent.
At this point Atari US does not have a buyer lined up, but it is likely that Wilson will look to keep control after reorganization, with the support of backers.
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