Atari’s US business has filed for Chapter 11 bankruptcy in an attempt to break away from its French parent company.
As reported by the LA Times, the long-standing developer and publisher has secured $5.25m of debtor-in-possession financing to continue operations while proceedings move forward.
The US business is hoping that splitting off from its parent company AtarI S.A., formerly known as Infogrames, can help make its operations more profitable and allow the company to further expand into mobile and digital platforms.
It is also hoped that if it can successfully complete bankruptcy proceedings, the company can emerge almost debt free as it currently has a heavy financial reliance on London-based firm BlueBay Asset Management.
Atari’s $28m credit facility with the company lapsed on December 31st, and Atari now lacks the funds to release in-development games such as real-money gambling title Atari Casino.
Although Atari S.A. has been profitable for the last two years, having not been so for around a decade, most of the company’s profits are believed to have come from its US operations.
Despite increased profitability however, revenue dropped 43 per cent in 2011 and 34 per cent in 2012.
Shares in Atari S.A. are now valued at less than one Euro.