Midway Games files for bankruptcy

Video game co. in debt after ownership change

Midway Games Inc., best known for its “Mortal Kombat” video games, said Thursday that it filed for Chapter 11 bankruptcy protection.

Midway said the filing stemmed from a change in ownership in late 2008 that led to accelerated buyback requirements related to two classes of debt that the company did not think it could fulfill.

In December, media mogul Sumner Redstone sold his majority stake in Midway – an interest of about 87.2 percent – to a company led by private investor Mark Thomas.

In a statement, Midway Chief Executive and President Matt Booty called the bankruptcy filing a “difficult but necessary decision.”

“We have been focused on realigning our operations and improving our execution, and this filing will relieve the immediate pressure from our creditors and provide us time for an orderly exploration of our strategic alternatives,” he said.

Midway said that it and its U.S. subsidiaries filed voluntary petitions in U.S. Bankruptcy Court for the District of Delaware.

Midway said the filing does not include its operations outside the U.S., and that they will continue to operate as normal.

The company is seeking several first-day motions so it can continue to operate normally.

Midway shares fell 10 cents, or 40 percent, to 15 cents in morning trading.

Want to read more articles like this one? SUBSCRIBE TO VARIETY TODAY.
Post A Comment 0

Leave a Reply

No Comments

Comments are moderated. They may be edited for clarity and reprinting in whole or in part in Variety publications.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

More Biz News from Variety