For those unfamiliar with US corporate law, OnLive's announcement on Monday that it would be going through a process named the "assignment for the benefit of creditors (ABC)" would have been somewhat bewildering.

ABC is a kind of mini-insolvency, a method of staying in business despite extreme financial difficulties. There is no direct UK equivalent, and even in the US it is much less common than the Chapter seven and Chapter 11 forms of bankruptcy. So what does it all mean?

"It's a bit complicated," says Jas Purewal, an interactive entertainment lawyer at Osborne Clarke, "ABC is an alternative to formal insolvency proceedings under US law. It involves selling on the assets of a business to a third party, which takes those assets free of any other liabilities the company may have.

"OnLive can't pay out creditors and so has decided to arrange for the valuable assets of the business to be sold, which in theory raises cash to pay the creditors, and at the same time means that a new phoenix can arise from the ashes of OnLive and carry out the business of the company."

The immediate outcome is this: the OnLive assets and trademarks have been acquired by a newly-formed company – backed by investment firm Lauder Partners – which will continue to operate under the OnLive name.