Artifact Entertainment files for Chapter 11 Bankruptcy Protection

Company says Horizons, its massively multiplayer title, will be unaffected

According to information on the official Artifact Entertainment Web site, the company recently and voluntarily filed for Chapter 11 bankruptcy protection.

The company addressed player concerns on the Horizons Web site (http://www.istaria.com/page.php?pg=news&PHPSESSID=c55726c1f1053d343bb9b3b5cea152eb). Horizons is the massively multiplayer online game developed by Artifact Entertainment and published by Atari.

On the game's Web site, Artifact stated:

"Artifact Entertainment recently – and voluntarily – filed for Chapter 11 bankruptcy protection. Below are some FAQ’s about this filing, Artifact Entertainment and the future of Horizons: Empire of Istaria.

Q: Will game play be interrupted by this announcement or the filing for protection?

A: Absolutely not! The team at Artifact is very committed to Horizons and will continue to service the game, support the game and improve the game. Again: Game play will not be interrupted at all by this decision.

Q: What led to Artifact Entertainment filing for Chapter 11 bankruptcy?

A: We had been working to restructure our debt and reached agreements with many vendors. However, we were unable to negotiate a satisfactory agreement with one vendor. This resulted in our decision to seek protection under Chapter 11 to improve the company’s financial situation.

Q: What is Chapter 11 and how will it affect Artifact Entertainment business and Horizons service? Will the company continue to provide ongoing service to Horizons' fans during the restructuring period?

A: Chapter 11 bankruptcy protection is used by companies experiencing cash flow difficulties who need time to restructure debt to continue operations. Continental Airlines and May Company department stores are two examples of companies that successfully used Chapter 11 protection to get their businesses into better financial health. We have sought court protection in order to prevent interruption of service and are taking every step possible to ensure Horizons’ players experience seamless game play. In fact, Artifact Entertainment has been working diligently to create new content for the game, including the development of new creatures, quests, events and lore that will be introduced within the next two months.

Q: What previous actions were taken to try and alleviate the situation?

A: We have gone through two staff reductions this year, a payroll cut, foregoing of management salaries, and negotiating payment plans with creditors, with the exception of one vendor as described above.

Q: In terms of other actions being taken to get the company into better operating shape, can we expect to see more layoffs?

A: Currently, we are in talks with a seriously interested company that wants to acquire the assets of the company while retaining key staff to maintain operations of Horizons.

Q: Is Artifact Entertainment filing for Chapter 11 voluntarily?

A: Yes. We took all the necessary steps to cut improve cash flow and reduce expenses. We believe this is the best option to take regarding the goal of strengthening our financial status and also keep the worlds of Istaria alive and well.

 

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