Three firms file class action suits
The saga of THQ’s failed uDraw franchise has drawn the ire of three different law firms, who have each filed class action suits against the publisher. The grounds for the suits seem to be based in allegations that THQ violated federal securities law over the handling of the failed uDraw title franchise and the uDraw GameTablet peripheral.
These lawyers all believe that THQ made “false and misleading statements,” when briefing investors about the expected sales from the Xbox 360, PlayStation 3, and Wii versions of uDraw’s titles and GameTablet. While sales for the Wii version of the uDraw tablet in early 2011 seemed good and the idea of bringing the franchise to the Xbox 360 and PlayStation 3 seemed like an even better idea, it didn’t end up that way; $30 million in losses forced THQ to kill the entire franchise.
While all three firms are looking to recover damages for shareholders who purchased THQ stock between May 2011 and February 2012, this is a problem that THQ does not need while it continues to fight for its survival. The law firms involved in the class action suits are seeking other affected shareholders and asking them to become a part of the class action suit.
Just when we think THQ might catch a break and things might be on the uptick for the publisher, a new problem always seems to arise to drag THQ back down. We will have to see where the lawsuits lead, but it could spell some serious trouble for THQ.