Bankruptcy in Japan is a tad different than elsewhere, but the fundamentals are the same. Atlus or its higher ups couldn't pay off certain debts. Their assets were liquidated and the outstanding debt was probably dissolved. Rather than putting everyone out of a job, the company itself became an asset in its own right and the sale of it to another company such as Nintendo would go to pay off the debts. This case sounds close to Chapter 11 bankruptcy in US law. Not sure if Atlus was officially or unofficially bankrupt. Japanese culture typically abhors taking up the court's time and negotiations are handled in private.