Creditors of OnLive, the streaming game company that went through a bankruptcy alternative last week, might get larger payouts than previously thought.
On Wednesday, Joel Weinberg, CEO of Insolvency Services Group, said that based on OnLive’s assets and outstanding debts, he expected to only be able to pay about 5 to 10 cents on every dollar OnLive owed, an amount totaling some $30 million to $40 million. After getting new information, Weinberg, whose company is acting in a role similar to a bankruptcy trustee, now thinks that as a portion of what’s owed, the payouts will be more than he originally thought.
Weinberg declined to say what new information came to light or to give a new estimate for the payouts.
“We got a little bit ahead of ourselves,” he said, concerning the estimated payouts. “It’s very early in these cases. A lot of things can happen along the way.”
He added: “The bottom line is that it’s likely that creditors are going to do better than I estimated.”
Weinberg stood by his $30 million to $40 million estimate of OnLive’s total debts. Those figures represent the company’s total liabilities, the estimated maximum that creditors could claim that OnLive owed.
But he explained that included in those figures are amounts owed under contracts that may get transferred to the new incarnation of the streaming game company. For those and other reasons, creditors may end up making smaller claims that what they were technically owed or may not make any claims at all.
OnLive went through an “assignment for the benefit of creditors” on Friday, a process for dealing with insolvent companies that operates under state law, rather than federal bankruptcy law. As part of that process, the company transferred its assets to ISG and laid off all its employees.
ISG quickly sold OnLive’s operating assets to a newly created company funded by venture capital firm Lauder Partners. That company, which adopted the “OnLive” name, offered to hire back nearly half of OnLive’s employees and has continued running its services.
In addition to running its game service, OnLive owned a subsidiary named Mova, which provides motion-capture technologies used by filmmakers to create realistic, computer-generated characters for movies. Weinberg declined to say whether Mova was included in the asset sale to the new OnLive.
Update: Mova — along with its assets — is a subsidiary of the new OnLive, according to Jane Anderson, an OnLive spokeswoman.