Atari in the US wants to break away from its parent company, Atari SA, located in France. To do so, they have filed Chapter 11, which seeks protection from creditors. Four of the subsidiaries filed for bankruptcy in New York state. Like their early creation, Pong, Atari, a 40 year old name in video gaming, in its various forms bounced around among corporate shakeups and acquisitions while profits lagged.
The move to Chapter 11, according to an Atari press release is to "secure independent capital for future growth, primarily in the areas of digital and mobile games," an area where the US portion of Atari SA has been successful in comparison to the parent company. It is reported that their digital and licensing revenue accounted for 70 percent of revenue, even though, overall, Atari SA is expected to report a 2012 loss.
The parent company is making a similar move towards bankruptcy indicating that it is unable to finance its continued growth. Atari SA asked that trading of its shares on Euronext Paris market of NYSE Euronext be suspended.
Atari needs money to find new talent to continue the dynasty
Atari in the US is in need of fresh money to enable them to release games they are currently developing. Just last August, they held a contest for independent game developers to remake Pong. Winners were zGames, MadRuse Games and Eppy Games.
Filing Chapter 11 is to hold creditors at bay while Atari straightens out finances and breaks away from the home office while continuing US operations without significant disruption. Both European and US entities plan to continue their individual operations. Robert Mattes will continue as CFO of the US entities while Mrs. Laurence Betito will become CFO of Atari SA.