Atari, the iconic game company whose roots date back to the dawn of video gaming industry, has filed for the bankruptcy protection. Reportedly, the gaming company has done this as part of a move to separate from its French parent company. Founded by Nolan Bushnell in 1972, Atari will continue to operate during the bankruptcy proceedings.
The Atari bankruptcy filing includes several other companies operating under the names Atari Inc., Atari Interactive Inc., Humongous, Inc., and California US Holdings, Inc. The papers were filed in U.S. Bankruptcy Court in New York.
“With this move, the U.S.-based Atari operations seek to separate from the structural financial encumbrances of their French parent holding company, Atari S.A. (formerly Infogrames S.A.) and secure independent capital for future growth, primarily in the areas of digital and mobile games,” the company said in a press release.
As a part of the bankruptcy proceedings, Atari plans to sell all of its assets in a sale free and clear under section 363 of the Bankruptcy Code. The assets include the Atari brand logo, and such iconic game franchises as Pong, Asteroids, Centipede, Missile Command, Battlezone, Tempest, Test Drive, and Backyard Sports – among others.
The gaming company is asking the court to approve $5.25 million in debtor-in-possession financing from one or more funds managed by Tenor Capital Management, a firm specializing in convertible arbitrage and special situations.
Atari has always been facing lots of splits and issues pertinent to its identity. The company split into an arcade division and a consumer electronics division in 1984. Jack Tramiel’s Tramel Technology bought the consumer division, renamed Atari Corp. In 1998, Hasbro Interactive acquired the Atari Corp. business, renaming it Atari Interactive. In 2003, Infogrames Inc. licensed the Atari name and logo from Atari Interactive and changed its name to Atari Inc. In 2008, Infogrames completed its acquisition of Atari, Inc., making it a wholly owned subsidiary.