Interplay to Restructure Management

Video game publisher Interplay Entertainment Corp., which in May announced talks with a potential buyer, is expected today to unveil substantial changes to its board of directors and an overhaul of its senior management.

The restructuring of the Irvine maker of titles such as “Baldur’s Gate” comes weeks after French game publisher Titus Interactive increased its ownership of Interplay to a controlling 51% from 34%.

Negotiations with the suitor, meanwhile, have fallen through, and Interplay is no longer for sale, Interplay sources said.

Last month, Interplay reported that its first-half net loss widened significantly to $20.8 million from a $7.4-million loss last year. Sales dropped 25% in the same period to $32.1 million.

Brian Fargo, the company’s founder and chief executive, at the time blamed the loss on “painful and disappointing delays on the release of major . . . titles.”

Interplay released seven games in that period, compared with 21 last year. Last month, it laid off 50 people, or about 15% of its work force.

The company’s eroding financial picture has set the stage for conflict between Interplay’s management and its largest shareholder, Titus, which is controlled by brothers Herve and Eric Caen.

The Caens are set to nominate three board members to succeed Stanley Roach, Richard Lehrberg and Rob Sirotek, who recently resigned. No reasons were given for their departures. New members are Michel Welter, Michel Henri Vulpillat and Nathan Peck.

In addition, Titus has hired Europlay 1 in Los Angeles to make “additions” to Interplay’s eight-member senior management team.

It was unclear whether Fargo will remain CEO after the company’s shareholder meeting Sept. 18. Fargo was on his honeymoon and unavailable for comment.