Atari Settles FUNimation Dispute, Borrows Additional $4 Million

Atari has announced that it has settled its Dragon Ball Z dispute with anime distributor FUNimation for $3.5 million, also announcing that it has borrowed $4 million from investment company BlueBay, in addition to the $10 million in credit it secured in October, "to meet its holiday season financing needs." Notice of the FUNimation dispute came in early November when an SEC filing disclosed that the anime distributor was set to "terminate the license agreements based on alleged breaches of the license agreements," holding back Atari's release of Dragon Ball Z: Budokai Tenkaichi for Wii and PS2. Atari says it paid the distributor a cash payment of approximately $2.7 million and a reduction of $0.8 million in recoupable royalty advances made to FUNimation. Atari's 2004 securing of the exclusive Dragon Ball Z rights are to last to January 2010. With the settlement, the company has announced that Budokai Tenkaichi has been released. The company has also said that as a condition of the extra credit it has taken with BlueBay, it has terminated existing distribution agreements with Infogrames and created a new agreement that will cover all North American distribution of Infogrames games for the next three years, and vice versa for Atari, Inc. products to be distributed by Infogrames outside North America. The deal also sees Atari's holding of the 'Atari' trademark and www.atari.com licensed back to Infogrames "for the purposes of a global online initiative to be lead by Infogrames." Finally, all corporate management and service contracts have been terminated with Infogrames, and will see the transfer of some production and development employees to the former parent company.