updated 07:13 pm EDT, Thu August 23, 2012
Abrupt shutdown was imminent, says insolvency manager
Defunct game streaming service OnLive was apparently in greater financial trouble than anyone had previously guessed by the time it went insolvent last week. An executive at the firm that handled OnLive's insolvency process tells SiliconValley.com that the streaming service was between $30 and $40 million in debt to assorted creditors, with little hope of meeting those obligations any time soon. The company apparently had only days to live before its insolvency, and is said to have averted an even more disastrous shutdown by taking the path that it did.
Insolvency Services Group handled the proceedings for OnLive's "assignment for the benefit of creditors," and the CEO of that firm says the streaming company was in "dire straits." OnLive, apparently, faced a "hard shutdown," which would reportedly have been worse than actual events, which saw the company's entire staff dismissed with no warning.
The game streamer's assets were transferred to ISG, which will use them to partially pay OnLive's outstanding debts. The streaming service itself was transferred to another company, which calls itself OnLive and will continue to operate the games service. That new company is owned by venture capital firm Lauder Partners. The amount Lauder Partners paid for the service remains unknown. OnLive's creditors, it is believed, will receive only five to ten cents on the dollar for the company's debt.