Buyer Identified, Promises To 'Grow & Evolve'
Now that some of this weekend's dust has settled, the "newly-formed company" behind the OnLive buyout has revealed itself as an affiliate of an investment firm, set up as a brand new venture. They've acquired all of OnLive's assets and will continue to provide the cloud gaming service under the OnLive name.
Over half of the workforce has already been hired back, while the other half of "non-hired" employees will apparently be offered "consulting" work in return for stock options. Replacing their newly-worthless stock options. Erm. Right.
OnLive effectively declared bankruptcy last Friday by restructuring under an 'Assignment for the Benefit of Creditors," a day before laying off over 50% of the workforce. OnLive's assets were then sold in full to an affiliate of Lauder Partners, who created a new company. This new outfit will run the cloud gaming service as before, under the same name.
Here's the official statement in full.
OnLive, Inc.’s board of directors, faced with difficult financial decisions for OnLive, Inc., determined that the best course of action was a restructuring under an “Assignment for the Benefit of Creditors.” The assignee of the company’s assets then sold all of OnLive, Inc.’s assets (including its technology, intellectual property, etc.) to the new company. Unfortunately neither OnLive, Inc. shares nor OnLive staff could transfer under this type of transaction, but almost half of OnLive’s staff were given employment offers by the new company at their current salaries immediately upon the transfer, and the non-hired staff will be given offers to do consulting in return for options in the new company. Upon closing additional funding, the company plans to hire more staff, both former OnLive employees as well as new employees.
The asset acquisition, although a heartbreaking transition for everyone involved with OnLive, allows the company’s core innovation and ongoing offerings–the product of over a decade of hard work transforming the OnLive vision into reality–to survive—and continue to evolve.
As some of our readers have already pointed out, this buyout could be construed as an incredibly cynical way of shedding debts while still allowing the company to operate, with the only victims being numerous unemployed staffers whose stock is now completely worthless (and hence, their share in the company neutralised. Interesting.). We also rather take issue to the term "non-hired," which is one of the most callous pieces of jargon we have ever seen. And don't get us started on the "heartbreaking transition," which was premeditated, planned and executed as part of this decision.
It's probably above board, and if this new company does manage to make good on its promise to "hire more staff, both former OnLive employees as well as new employees," this may well be for the best (even though it really doesn't sit right at the moment).
As far as the OnLive service is concerned, it's business as usual - and there was no loss of functionality during the "heartbreaking transition."
More as the story develops.