The downward slope for Mad Catz Interactive Inc started on February 9, 2016. The elimination of 37% of its workforce signaled the beginning of struggling times. The company explained this business decision as a side effect of sales of Rock Band line which were lower than expected. Since then, the provider of entertainment products continued to face financial insolvency. This sensitive situation culminated with the date of March 30, 2017, when Mad Catz filed for Chapter of U.S. Bankruptcy.
PricewaterhouseCooper Was Appointed the Trustee of Mad Catz
For almost three decades, Mad Catz enriched the gaming market with innovative gear and entertainment products. However, on March 30, 2017, the company proceeded to a voluntary assignment in bankruptcy in Canada. From now on, all its property is in the care of PricewaterhouseCoopers, its trustee. The organization in its turn is going to organize the liquidation of the assets.
The acquired funds will have the goal to cover the debt of the company. At the same time, Mad Catz took advantage of Chapter 7 in the United States. This way, Mad Catz enjoys protection for the entire process of asset liquidation.
Mad Catz Was Delisted Last Week Due to Poor Performance of its Entertainment Products
The decline of the provider started a few years ago. The revenue of the company couldn’t regain momentum from a continuous drop. Last year, the company had to eliminate nearly 40% of its staff. This decision was a result of heavy investment in Rock Band 4 of Harmonix which ended up being unprofitable.
At the beginning of 2017, the company announced a new line of arcade sticks called Tekken 7. At the same time, the New York Stock Exchange warned Mad Catz of delisting it if its financial decline wasn’t fixed. However, the company didn’t manage to revive its stocks from extremely low rates. As a consequence, they hit the bottom line last week with an all low time price of $0.4. This was the last drop that delisted the company for good.
The board of executives was aware of the critical situation. They hired a financial adviser and considered together several options. These alternative plans reviewed several scenarios, such as continuing with their debt, selling their assets or selling the entire company. However, the lenders of the company refused to back up any of these possibilities. Thus, the company had no other choice but to file for bankruptcy and liquidate its assets to cover its debt.
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