Emerging from Chapter 11 Bankruptcy
Atari filed Chapter 11 Bankruptcy in 2013.
As a kid, I loved Atari games. Combat, Dodg’em, Laser Blast, and Venture are just a few of my fond memories of Atari. In the 70’s, this was the game to get.
In 2013, I wrote about the Chapter 11 bankruptcy of Atari. My childhood experiences with video games lead me to ask: Where is Atari now? It is reinventing itself from bankruptcy.
Atari – 50th Year
In 2022, Atari celebrates its 50th anniversary.
Emerging from Chapter 11 – New Boss
The company has a new boss, Wade Rosen. He is determined to turn a badly tarnished gaming icon into something relevant to the present and to the future. Rosen took the top position at the company in March of 2022.
Rosen intends to emerge Atari from Bankruptcy. He is shifting away from Atari’s previous model of brand licensing. Many failed and bizarre partnership and offshoots for hotel chains, movie productions and casinos are not Rosen’s vision for Atari.
Rosen’s immediate plan centers around upgraded retro games. Down the road, he would like to turn the company back into a game publishing giant. Rosen is aware of the limitations of a company. At this time, there are around 25 employees. Rosen is banking on the fact: “It’s much easier for us to make [retro updates] than to make a massive open-world 100-hour gameplay experience.”
If you search Amazon, you can see Atari is still selling after its bankruptcy.
While the nostalgic element of the bankruptcy announcement saddened many, the company asserted that the move was required to grow as a company and focus more on increasingly popular digital games and licensing. For example: Pac-Man remains popular even among young gamers, and licensing that game to other gaming companies will help Atari remain solvent.
What is Chapter 11 Bankruptcy?
Chapter 11 is the more popular approach for corporations who want to continue to do business. This is the chapter that Atari filed. Essentially, it allows the company to retain all or most of its assets while repaying its creditors with future earnings. This form of bankruptcy filing acts as a reorganization rather than a liquidation. Chapter 11 bankruptcy allows the company to continue operating as a debtor in possession. Once the creditors are paid completely, the operation of the company may continue as normal.
Atari 2013 Bankruptcy Filing:
The CEO of Atari stated the Chapter 11 filing was the best decision to protect its shareholders. In addition, the filing allowed Atari to separate from its parent company, which operates in France and has filed similar bankruptcy proceedings under European law.
On initial examination, the end of Atari may seem as sad as the divorce of Pac-Man and Mrs. Pac-Man. However, the company gained much more popularity with digital games rather than console games, and may continue to produce games while it undergoes the bankruptcy process. Atari consoles are generally not in use anymore, so what initially seems like a destroyed memory is actually closer to a second chance for the troubled company.
Bankruptcy Saves Businesses for the Future
With proper counsel and careful bookkeeping records, an individual or company can emerge from bankruptcy in much better financial shape. Financial success is gained after learning what mistakes they made the first time and how to avoid making similar mistakes. An experienced and savvy bankruptcy attorney can mean the difference between financial solvency and financial ruin.
I hope Atari continues to reinvent itself. It is nice to see something that was great not fade away as only a distant memory.
Filing Chapter 11 was the right move. However, Atari is not gone.
I am a strong proponent of starting over. Bankruptcy is not a failure; you can emerge from bankruptcy. It is a chance to reinvent both companies and individuals.
If you or your company is having difficulties, call me for a free bankruptcy consult. I am here to help you shape up your financials.