"In light of the current situation with BlueBay, we have decided to take what we think is the best decision to protect the Company and its shareholders. Through these ongoing procedures, and especially the auction process in the U.S., we will seek to maximize the proceeds in the best interest of the Company and all of its shareholders," said Jim Wilson [CQ], CEO of Atari SA, in the statement.
Filing for bankruptcy protection is a way to protect Atari's U.S. operations from creditors, and also from financial obligations of its parent company, said Elizabeth Nowicki [CQ], a professor at the Tulane University School of Law.
"Far fewer would be willing to invest if it is subject to the French parent company," Nowicki said. Assets tied to Atari's U.S. operations are frozen, though daily operations should continue normally.
With bankruptcy protection, it could also become easier for Atari's U.S. operations to raise capital, Nowicki said.
"The interesting thing is what is going to happen from here," Nowicki said, adding that it is likely that Atari's U.S. assets may be bought out by private investors.