JT Storage - Merger With Atari Corporation and Demise

Merger With Atari Corporation and Demise

On February 13, 1996, JTS merged with video game console and former home-computer producer, Atari Corporation. It was primarily a marriage of convenience. JTS had products but little cashflow. Atari had money, primarily from a series of successful lawsuits earlier in the decade followed by good investments, but with its Jaguar console struggling in the marketplace, losses mounting, and no other products to sell, Atari expected to run out of money within two years. While JTS announced plans to continue both brands, within a few weeks of the merger becoming official on July 30, 1996, the majority of former Atari employees were dismissed and Atari's remaining inventory was sold to liquidators.

Even with the cash infusion from Atari, JTS quickly ran out of money. On February 23, 1998, JTS sold the Atari intellectual property to Hasbro Interactive for $5 million in cash (the name had already been sold to THQ for home use and Midway/Williams for arcade use). Later that year, on December 11, JTS filed for Chapter 11 bankruptcy, converting to involuntary Chapter 7 on February 28, 1999.