Atari Completes Restructuring; Settles With FUNimation

Authored by Mark Hefflinger on December 11, 2007 - 10:09am.

New York - Struggling video game publisher Atari (NASD: ATAR) announced on Tuesday that it has completed some of its restructuring plans, altering its relationship with parent company Infogrames, and secured $4 million in new borrowing capacity to meet its holiday season financing needs. The company also announced that it has settled its dispute with FUNimation, holder of the "Dragon Ball Z" license, and will pay the company a total of $3.5 million while retaining the game rights through 2010.

Atari said it has terminated its existing distribution agreements with Infogrames, and signed a new three-year deal wherein Atari will distribute Infogrames' products in North America and elsewhere, with Atari retaining 30% of net receipts.

Atari has also terminated its corporate management and services contracts with Infogrames, with Atari to transfer certain employees from its production and development businesses to Infogrames.

Atari said its workforce reduction is expected to save the company $5.3 million per year.

The company will now focus on game publishing and distribution, as opposed to game development.