OnLive Bought by, Um, OnLive (Via Former Investor Lauder Partners)

Here’s a press release I just got sent by OnLive, about its sale to its mysterious new investor.

Which is actually an old one — Lauder Partners, which invested in the innovative cloud-gaming service in 2009. Under the new arrangement, the start-up will still be called OnLive, operate in the same manner, but with only about half its old staff hired back to work for the Lauder “affiliate.”

Whatever that is!

In other words: OnLive is dead! Long live OnLive!

Such confusion is par for the course in this most bizarre of Silicon Valley restructurings.

On Friday, the Palo Alto, Calif., company abruptly laid off its staff and went dark about what was going on, making a series of ever more opaque statements.

Along with the new press release, designed to clear up the mess, OnLive included an FAQ about the transaction. But it still leaves many questions unanswered.

Such as the price paid by Lauder for the assets, as well as whether founder and CEO Steve Perlman was still running the joint.

Here’s one thing that was made clear: The employee’s equity in OnLive the First, as well as that of investors, has gone poof in the new configuration of OnLive the Second.

That would be at least $56 million from investors, as well as tens of millions more in funding from earlier.

Said the company: “OnLive, Inc.’s board of directors, faced with difficult financial decisions for OnLive, Inc., determined that the best course of action was a restructuring under an ‘Assignment for the Benefit of Creditors.’ The assignee of the company’s assets then sold all of OnLive, Inc.’s assets (including its technology, intellectual property, etc.) to the new company.”

Incredibly, in its statement, OnLive had the audacity to say that it was a “heartbreaking transition for everyone involved with OnLive.”

For the other half of the staff — inexplicably called “non-hired” in the press release — laid off in such a manner, it certainly was.

Apparently, they might be able to consult “in return for options in the new company,” and could perhaps even be hired later.

Gee, thanks!

Oh, go read it for yourself: