Cloud-gaming service OnLive, which underwent a dramatic reversal of fortune in August during which all staff were laid off and the company entered proceedings labelled as “Assignment for the Benefit of Creditors”, was ultimately sold off to venture capitalist Gary Lauder for just $4.8 million USD. The company had outstanding debts of almost $19.0 million USD.
Once valued at pie-in-the-sky amounts from anywhere between $1.1 billion to $2.2 billion USD by professional analysts such as VCExperts’ Justin Byers, OnLive’s liquidation will prove to be a costly for its creditors. They are expected to receive fewer than 26 cents on every dollar owed.
This affects businesses like the Prolific Oven Bakery in Palo Alto, California, which was owed $2,000 USD by OnLive.
Lauder purchased OnLive’s assets for $4.8 million USD, set up a successor company and kept the service running under the same name. Half of OnLive’s original staff were offered new jobs, though salary and benefit details have not been revealed.
So not only is this ‘new’ version of OnLive able to continue operating the same service, under the same name, it is also able to side-step the money owed to its creditors after a high-profile failure, and is openly seeking new investment. The dark art of finance is quite a thing to behold.
Source: Mercury News