"Had the sale to the buyer not taken place, the assignee would have been left with inadequate capital to fund the significant costs to preserve and market OnLive's patents and other intellectual property, thus greatly reducing expected recoveries essentially to those of a forced piecemeal auction.

"When planned financing didn't work out, the company was left with few options," responded OnLive in a statement.

"Transitioning through this unexpected event has not been easy, but it has left the company much healthier."