Fans of complicated legal and financial maneuvering will no doubt get a kick out of OnLive’s transition from company on the brink to brand new company where everything is fine. The situation on Friday looked pretty dire for the cloud gaming service, with more than half of its employees reportedly laid off and serious financial problems brewing.
Over the weekend, it was announced that OnLive undertook some complex restructuring under something called an “Assignment for the Benefit of Creditors”. With this in place, an unnamed ‘assignee’ of the company’s assets (the technology and intellectual property) was able to transfer said assets to a buyer; now revealed as an affiliate of the tech investment company Lauder Partners.
Under this agreement, neither shares nor staff could be transferred. Just under half of the original 150-200 OnLive employees are said to have been rehired by the new company (which will continue to trade as ‘OnLive’). However, this suggests that all original staff have lost any equity (stock options and the like) they had in the first incarnation of OnLive.
An OnLive-issued FAQ states: “Like all shareholders, neither Steve [Perlman, CEO] nor any of his companies received any stock in the new company or compensation in this transaction at all.” It also notes that “most” executives have taken “reduced compensation”.
The OnLive service is “expected to continue to operate smoothly under the new company” and all games, products and services are said to remain available.