THQ debtholders object to bankruptcy and sale

THQ lenders and noteholders have filed objections to the publisher's bankruptcy and pending sale to private equity firm Clearlake Capital Group. The complaints claim that bankruptcy proceedings and prompt sale to Clearlake were orchestrated against the best interests of the company's debtholders.

VentureBeat reports that several of the company's lenders find that lenders' financial interests would have been better served if the company had a longer bidding process. Not only that, but THQ should have allowed its assets to be bidded on piecemeal to try for a better financial bottom line--i.e., one publisher could buy Saints Row (and maybe even developer Volition) while another snatched up Darksiders.

However, the agreements included several clauses to "chill" the bidding process, requiring that parties other than Clearlake buy THQ whole and at an excessive price, the lenders claim.

Another objection filed by a coalition of THQ's convertible noteholders was spotted by Distressed Debt Investing. It calls out THQ president Jason Rubin's note to fans as a partial admission that debtholder interest was not a priority in arranging the deal.

"On December 19, 2012, Jason Rubin wrote a letter addressed to THQ’s gaming customers in which he stated that 'the goal throughout the sale process has been to preserve our teams and our products' and that 'no matter what the outcome in 30 days, as long as we have accomplished this goal, I will be satisfied,'" the objection states. "Satisfaction of unsecured creditor claims appears not to have been one of Debtors’ management’s priorities."

We'll keep an eye on these disputes as they may substantially impact THQ's future as a business and publisher. THQ is withholding official response until the hearing begins tomorrow.