New details on OnLive’s insolvency

As I detailed in a story for the Merc, I got some new details today about OnLive’s insolvency.

Short story made even shorter: Streaming game company OnLive owed some $30 million to $40 million, was running out of cash and facing an imminent shutdown and had failed to find a buyer when it went through its “assignment for the benefit of creditors” process less Friday. That story also reveals that Insolvency Services Group is the assignee in OnLive’s assignment process. (An assignee is similar to a trustee in a bankruptcy.)

I have two other tidbits of note that didn’t make it into that story:

1. ISG has not yet sent out a formal notice letter to creditors alerting them to the assignment and informing them of the process to place claims. But it has 30 days to do so, and company CEO Joel Weinberg said the company will meet that deadline. Weinberg said some creditors have called him about the assignment. But it’s possible, because of the way these things work, that some creditors are not yet aware that OnLive was insolvent.

2. As I previously reported, OnLive laid off all of its approximately 200 employees on Friday and wiped out all stock and stock options held by them. In general under federal law, companies that lay off more than 50 workers are required to notify them 60 days in advance — or effectively pay them severance for an equivalent period.

Weinberg declined to comment on whether OnLive complied with that law. So too did Craig Prim, a bankruptcy attorney with Murray & Murray who OnLive brought in just weeks before going through the assignment process. Gary Lauder, a venture capitalist who is funding the new iteration of OnLive, and Jane Anderson, an OnLive spokeswoman, have also declined to comment.

Anderson has said that the new OnLive has extended job offers to about half of the old company’s employees.
Should it get additional funding, OnLive plans to offer jobs to other former employees, Anderson has said.

 

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