Starbreeze has today filed for reconstruction with the Stockholm District Court following a "shortage of liquidity" that requires the company to "negotiate a long-term financial solution".
After the "disappointing" launch of Overkill's The Walking Dead, Starbreeze's board of directors announced it was reviewing operations costs and implementing a program "to reduce costs and sharpen focus on core business". The plan initiated a cost-cutting program, which included scaling back both internal and external development and was expected "to generate significant cost savings during the full year 2019 compared to 2018".
Today, however, the Stockholm-based company has confirmed that financial targets for Q4 2018 and 2020 no longer apply after the latest statistics from Overkill’s The Walking Dead - despite its latest marketing efforts - affected the forecasted sales. In a brief statement, the company added it has "reduced the short-term forecasted revenue resulting in an expected shortfall of cash in January 2019" and let go CEO Bo Andersson, who has also resigned with immediate effect from the Board of Directors along with fellow director, Kristofer Arwin.
Right now the company insists "the reconstruction framework will include salaries to employees of Starbreeze and operations will continue as usual", but during the reconstruction period, no payments can be made to suppliers for services or goods relating to the period prior the filing. Suppliers will, however, be paid for services and goods provided during reconstruction.
The statement further warns that other subsidiaries Nozon, Parallaxter, Starbreeze LA Inc, Starbreeze USA Inc, Starbreeze Paris, Starbreeze Barcelona, Starbreeze IP LUX, Starbreeze IP Lux II Sarl and Dhruva Infotech Ltd "could be indirectly affected" by the reconstruction. Other companies within the group, however, will "not affected by today’s decision".