OnLive was days away from being completelyc closed down after accuring between $30 and $40m worth of debt.
As reported by Mercurynews, the company did not have enough money to pay up and was facing complete closure before it was sold to Lauder Partners after significant layoffs.
OnLive CEO Steve Perlman transferred all of the firm’s assets to the new owners, a former investor from 2009, with the streaming service to continue with the same name.
As part of the takeover, creditors will likely only receive around five to ten cents on each dollar owed.
"It was a company that was in dire straits. It only had days to live in terms of cash flow and the like," said Insolvency Services Group CEO Joel Weinberg.
"Something had to be done immediately or there would have been a hard shutdown, which would have been a disaster."
The Insolvency Services Group is the assignee for OnLive’s assignment for the benefit of creditors, an alternative to bankruptcy.