Acclaim Clings to Last Hope in Face of Bankruptcy Threat

Acclaim has found itself in a difficult financial predicament over the last year, having shed ballast in the form of lucrative licenses like Turok and All-Star Baseball in the hope of keeping the company afloat. It had been thought that Acclaim had managed to find a willing investor with a $30 million rescue package. Unfortunately, this arrangement has not been completed in time, and Acclaim’s previous backer – GMAC Capital Financing - is preparing to sever their relationship.

As a consequence, NASDAQ has had to begin delisting procedures on the basis of Acclaim’s “inability to meet the minimum market capitalization continued listing requirements of the NASDAQ Small Cap Market” and also its "...failure to file its quarterly report on Form 10-Q for the period ended June 27, 2004”. If this process was to continue unabated, Acclaim would be forced to file for bankruptcy.

However, all is not lost. GMAC Capital Financing has agreed to hold off its reclamation of monies owed for the time being. That could well provide Acclaim with enough breathing space to conclude a deal with its potential investors. Indeed, Acclaim has appealed against NASDAQ’s decision on this basis and as such, it expects the delisting to be reversed shortly.

As soon as Acclaim is officially re-listed, or forced into bankruptcy, we shall update you accordingly.