NEWS - Monday, August 30, 2004

Acclaim Files For Bankruptcy

Acclaim Entertainment, the Glen Cove, New York game company that got its start with titles such as WWF Wrestlemania and NBA Jam, officially filed for bankruptcy, has let all its employees go, and shut its doors for good, IGN learned today. The 600-employee company (NASDAQ: aklm) that owned studios in Manchester, UK, Austin, Texas, and was headquartered in Glen Cove, NY, was unable to renew a loan with GMAC Commercial Finance, and could not secure an additional $65 million loan from another financier. Friday, the company sent employees home, but there was no official or public conclusion of its closure. IGN spoke with several former personnel today who informed us of the brief and final meeting that was held on Friday, August 27, led by the company’s CFO Gerald Agoglia. "There was a short meeting held on Friday at 12:15 am," said a former employee who asked not to be mentioned by name. "It was a short speech. They said they regretted to inform us that they were not able to achieve the new loan they were seeking, and that they had to seek bankruptcy. They said, ’Thanks for your service. Please take your items from your desks and leave.’ They gave us 15 minutes to do that. "I’m sad about it. There are a lot of people here who have been at Acclaim for 10 or more years; some of them haven’t even had jobs anywhere else. So I feel bad for them. I’m (also) a little pissed off. I’m didn’t get paid for the last two weeks worth of work. All things considered, it’s a shame to see the company go out like this. There was a better way to handle this situation. But what can you do?" Games such as Juiced, The Red Star, and Worms 3D, which were slated for early September release, will NOT be published by Acclaim, IGN learned today. "Those games might be published by some other publisher, but not by Acclaim," the former employee said. "The code for those two games is done. So, I wouldn’t be surprised if some of the executives weren’t in negotiations to sell off those games to other publishers. But..." she added, "I don’t know for sure." Know primarily as a license-driven company in its early days on the NES, Commodore 64, and Genesis, Acclaim got a boost in 1997 from the comic book-based first-person shooter Turok, created by Iguana Studios, its Austin, Texas-based development team. Other popular Nintendo 64 games (at the time) were Extreme-G and WWF Warzone. Acclaim was part of the N64 "Dream Team." But Acclaim was never able to steady its development nor its financial course. Games such as Dave Mirra Freestyle BMX and its sequels performed well, until Activision bought developer Z-Axis (which designed the extreme sports title) in May 2002, and there was much potential for titles such as Burnout 1 and Burnout 2, but again, Acclaim ended its relationship with Criterion, which was bought by EA one year later. In 2002, after Turok: Evolution failed critically and financially, the company lost a lot of steam. About a year later it haulted production on NFL Quarterback Club. And even its well-received All-Star Baseball series, one of its annually popular titles, was forgotten, as other publishers ramped up their baseball games. Acclaim was unable to steady itself with SHOWDOWN: Legends of Wrestling and unproven titles such as Juiced and The Red Star. In mid-August, however, the first major warnings appeared. Acclaim missed its regular payroll on August 15, and employees were paid three days later (August 18). "That was the first time they ever missed payrole," said a former Acclaim game analyst. "And the paychecks were three days late. We were in shock. When we inquired about it, they didn’t want to answer questions about whether we would get paid the next week. They said when we get to that bridge, we’ll cross it. They could’ve handled it much better." In the US, Acclaim paid its employees for the first two weeks of August, but failed to pay for the remainer of the month. UK employees, apparently, are paid monthly; they were not paid for the entirety of August. Acclaim is paying employee benefits until August’s end. "We worked our asses off and we worked long hours and a lot of people have mortgages, they have bills, and they left us hanging. I mean, it was so quick, we were hit so quickly, we didn’t really have time to react. It was a stressful day Friday, and they were really closed-knit about all the details."

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