Acclaim bankruptcy a possibility
Embattled publisher faces serious difficulty if new credit facility fails to appear.
Publisher Acclaim has announced its full-year results for the twelve months ended March 31st, revealing a net loss of $56.4 million and a major decline in revenues - along with a warning that the firm may face bankruptcy in the near future.
As reported on gi.biz last month, Acclaim is currently seeking a new credit facility to replace its existing arrangement with GMAC Commercial Finance, but despite signing a letter of intent for a $30 million facility, has not managed to finalise a deal as yet.
It's this situation which has led to the bankruptcy warning; "failure to obtain a new banking facility would materially affect the company's operations and liquidity," the report cautions, "and the company could be forced to cease operations or seek bankruptcy protection."
Even outside of that eventuality, the situation for Acclaim is hardly rosy. While the net loss of $56.4 million is actually an improvement on last year's $84.8 million loss, revenues were down substantially - falling $67.4 million to $142.7 million in total.
The firm, which has struggled to achieve market success with much of its line-up recently, also mentioned in its report that it is currently in default of payments on the 16 per cent convertible notes it sold last year in fund-raising effort, but it hopes to receive a waiver from note-holders.
In product terms, Acclaim announced a number of new titles which it will be publishing in early 2005 - with its line up for the winter/spring period 2005 now including Interview with a Made Man (PS2, Xbox), ATV Quad Power Racing 2 (PS2, Xbox), Emergency Mayhem (PS2, Xbox) and The Last Job (PS2, Xbox).
However, the company also admitted that Combat Elite: WWII Paratroopers, a key title which was meant to come out this month, has been delayed indefinitely due to a legal dispute between the publisher and developer BattleBorne. It would seem that BattleBorne has attempted to terminate its agreement with Acclaim, alleging violations of the contract; the New York State Supreme Court has imposed an injunction preventing the game from being released until such time as this matter is settled.