Starbreeze AB (publ) filed for reconstruction along with five of its Swedish subsidiaries, including Starbreeze Studios, due to “a shortage of liquidity,” according to a news release from the company on Monday.
Starbreeze Publishing, Starbreeze Production, Starbreeze Studios, Enterspace, and Enterspace International are the company’s Swedish subsidiaries which also filed for reconstruction with the Stockholm District Court in a move that was “deemed to be a necessary step to give the Company the time needed to negotiate a long-term financial solution and implement changes in the organization and operations.”
Along with the reconstruction, the departure of two key individuals was announced. Bo Andersson, CEO, will resign from his position and the Board of Directors. Kristofer Arwin also resigned from the Board, both departures are effective immediately. Other changes to management or the Board will not occur as a part of the reconstruction, according to the news release.
“The reconstruction framework will include salaries to employees of Starbreeze and operations will continue as usual,” the release stated. “During the reconstruction period, no payments can be made to suppliers for services or goods relating to the period prior to the date of filing for reconstruction. Suppliers will be paid for services and goods provided during the reconstruction period.”
The decision comes just over one week after Starbreeze Studios reported low sales of “Overkill’s The Walking Dead” had put the company into review mode, as it needed to review a plan to “reduce costs and sharpen focus on core business.”
As to how far-reaching this decision is, Nozon, Parallaxter, Starbreeze LA Inc, Starbreeze USA Inc, Starbreeze Paris, Starbreeze Barcelona, Starbreeze IP LUX, Starbreeze IP Lux II Sarl and Dhruva Infotech Ltd are noted as having the potential to be indirectly affected by the reconstruction. The aforementioned entities are all “partly funded” by Starbreeze AB (publ).
Other companies are not affected, according to the news release.