ATARI : ATARI : UPDATE ON CURRENT SITUATION
UPDATE ON CURRENT SITUATION
*Stabilization of Atari SA's situation in France, business at a standstill
*Ongoing Chapter 11 Proceedings of Atari's US Subsidiaries on which Atari
SA has only a limited influence
*Suspension of trading of Atari shares maintained, pending better
visibility over the outcome of the ongoing Proceedings in the US
*Modification of the Board
Paris, France, April 24, 2013 - Atari SA (the "Company" or "Atari") is
communicating on the latest developments regarding its situation and the
progress of the Chapter 11 Proceedings in the US (the "Proceedings") of the US
subsidiaries (i.e. Atari Interactive, Inc., California US Holding Inc., Atari
Inc. and Humongous Inc.) (the "US Subsidiaries").
Readers are invited to refer to Atari's previous communications on
Recent actions taken by Atari's management in France
Atari's situation in France has been stabilized:
*Atari's business in France is being maintained but at a standstill and
consists only in following the Proceedings in the US. The liquidation of
Eden Games, started on January 29, 2013, is in process.
*Alden^ and Ker Ventures have agreed to postpone the payment of any
interest due by the Company under the ORANEs they hold until the earlier
of: September 30, 2013 or a period expiring thirty (30) days after the
termination of the Chapter 11 Proceedings in the US. The coupons have been
paid to the other ORANEs bondholders in accordance with the stated
contractual maturity date.
*Negotiations with Alden have also been made, permitting the extension of
the maturity date of the EUR 21.4 million credit facility (the "Credit
Facility") and the corresponding interest to July 25, 2013, which is also
the maturity date of the $5 million DIP financing granted by Alden to the
The cash position of Atari SA as at March 31, 2013 is about EUR 1.5 million,
which should be sufficient for the Company to cover its financial obligations
until July 25, 2013 (excluding repayment of the Credit facility) and therefore
follow the US Proceedings over the period.
In order to enable Atari to repay its Credit Facility and maintain (if
possible) its operations after July 25, 2013, sales of assets in accordance
with the Chapter 11 Proceedings in the US are necessary. The scope of such
sales and their prices will be determined in the course of the Proceedings and
under the final control of the US bankruptcy judge, as further detailed below.
The outcome of the Proceedings, which will also need to be approved by the US
creditors, will be of particular importance for Atari and its shareholders.
The possible options for continuing operating will be assessed at this point,
depending on the remaining assets, as the case may be, their potential and
Progress on Chapter 11 Proceedings in the United States
The Chapter 11 Proceedings with the Bankruptcy Court in New York, handling the
case submitted by the US subsidiaries on January 21, 2013 (the "Court"), are
still pending. The various stages in the Proceedings and the main documents
and motions are being published directly by the Court as they progress. They
may be consulted online at the following link:
As at January 21, 2013, the US Subsidiaries did not have sufficient resources
to compensate the US creditors repay the abovementioned loan and finance a
reorganization of its business. Today, the situation remains unchanged.
Therefore, the option chosen by the US Subsidiaries during the Proceedings has
been to solicit offers from third parties as part of a sale process (the "Sale
Process") for all or part of the US assets, in accordance with section 363(c)
of the US Bankruptcy Code. These assets form the bulk of the Atari Group's
As indicated in the Company's press release of February 5, 2013, in the
context of the Chapter 11 Proceedings, Alden made available a maximum USD 5
million debtor-in-possession (DIP) cash financing to the US Subsidiaries,
enabling them to keep operating. The creditors' committee hasalso been
The Court entered an order establishing April 30, 2013 as the deadline for
filing proofs of claims by parties who may hold claims against the Debtors
that arose prior to the date of filing for bankruptcy.
Regarding the offer submission process, the next step will be for third
parties to submit binding offers. Atari SA will have no authority to accept or
reject them. Indeed, due to the US bankruptcy law, the independence of the
parties in the Proceedings and the powers granted to the Court, Atari SA has
limited influence over the decisions taken in connection with the
restructuring of its subsidiaries and the progress schedule.
Potential buyers (the "Potential Buyers") include both financial and strategic
buyers, the latter category consisting of both gaming and non-gaming
companies. They have executed non-disclosure agreements to gain access to a
virtual data room established by the US Subsidiaries to assist them with their
due diligence regarding the assets. The discussions and negotiations between
the US Subsidiaries and the Potential Buyers are still ongoing.The US
Subsidiaries anticipate that, in the coming weeks, these negotiations will
culminate in the submission of binding offers by the Potential Buyers.
Following the submission of such offers, the Debtors will seek the Court's
approval of bid procedures, which will set forth the next steps in the Sale
Process as well as the procedures for the selection of higher and better
offers and a potential auction.
For this auction phase, the US Proceedings may include the mechanism of
"stalking horse" offers. Under this mechanism, certain offers may be accepted
in advance(i.e. stalking horse offers). If such an offer is accepted, this
offer will be the subject of a motion to the Court, notice to creditors and
other interested parties, in order to seek authorization to proceed with such
offer in accordance with its terms unless a higher offer is submitted.
Therefore, the prospects of Atari SA and its shareholders will depend on the
outcome of such Proceedings and the proceeds received from the sale of all or
part of the assets, net of all legal and transactional costs, staff costs and
other operating costs approved by the Court in the context of the Proceedings
and after distributions to creditors, including repayment of the DIP financing
of $5 million maximum and the Euro 21.4 million Credit Facility.
Suspension of trading maintained
Considering the complexity and uncertainties of the US Proceedings, the
Company is not at this stage in a position to request the resumption of
trading of Atari shares on the NYSE Euronext Paris market.
The Board of Directors expects the Sale Process to be complex. It therefore
believes that it is preferable to be in a position to provide shareholders
with details of the offers received before considering a resumption of trading
of Atari's shares. Details of the offers will be released by US Subsidiaries
in the course of the Proceedings and Atari will seek to ensure prompt
communication of the information.
At this stage, no guarantees can be given concerning the potential recovery
for existing shareholders. The market and the shareholders will be informed
with 48 hour prior notice if trading is to resume.
Changes at the Board of Directors
Alyssa Padia Walles, president of Amplitude Consulting, has joined the Board,
effective April 4, 2013, replacing Alexandra Fichelson. Ms Walles has
extensive experience in media start-ups to multinational companies.
Alyssa Walles has a wide expertise, notably in the development and management
of companies, sales, brand promotion as well as international marketing in the
interactive business (video games, apps, on-line games, etc.).
She had high management positions in companies such as Sony Computer
Entertainment Europe where she contributed to the PlayStation launch. She
knows Atari well, as she was Senior Vice President, Corporate Evolution of
Infogrames / Atari from 2000 to 2003 and played an important role in the
integration of GT Interactive and Hasbro Interactive and handled the marketing
intiative to enhance the Atari brand.
As a strategy consultant, Alyssa Walles has worked on brands like
Fisher-Price, Nimbus Games, Leapfrog, Nutri-Ventures, Integrity Media, Sony
Pictures Home Entertainment and Backyard Sports, in particular as co-president
of Humongous, Inc.
Alyssa Walles holds a degree in "Cinema" from University of Southern
California and is also a mentor at the USC Marshall School of Business, a
founding member of the Long Beach TEC (a multimedia incubateur) and a
consultative member of the [a]list games.
According to French regulations, the Board of Atari has reviewed on April 4,
2013 the composition and independance of its directors. As of today, the Board
of Atari is the following:
*Frédéric Chesnais - Président Directeur Général (CEO)
*Frank Dangeard - Independent Director, Chair of the audit committee
*Tom Virden - Independent Director, Chair of the recruiting and
*Erik Euvrard - Independent Director
*Alyssa Padia Walles - Independent Director
Alexandra Fichelson has resigned from the Board for personal reasons.The
ratification of the cooptation of Ms Walles, following the recruiting and
compensation committee recommandation, shall be submitted to the next
shareholders general meeting of Atari.
About Atari, SA
Atari (www.atari.com) is a multi-platform, global interactive entertainment
and licensing company. The original innovator of video gaming, founded in
1972, Atari owns and/or manages a portfolio of more than 200 games and
franchises, including world renowned brands like Asteroids®, Centipede®,
Missile Command®, Pong®, Test Drive®, Backyard Sports® and RollerCoaster
Tycoon®. Atari capitalizes on these powerful properties by delivering
compelling games online (i.e. browser, Facebook® and digital download), on
smartphones and tablets and other connected devices. The Company also develops
and distributes interactive entertainment for video game consoles from
Microsoft, Nintendo and Sony. As a licensor, Atari extends its brand and
franchises into other media, merchandising and publishing categories. For more
Calyptus - Marie Ein
Tel + 33 1 53 65 68 68
Alden Global Capital on behalf of Alden Global Value Recovery Master Fund,
L.P. (hereafter "Alden")
Atari: UPDATE ON CURRENT SITUATION
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