Midway files chapter 11 Posted By: GameLinx on 03/21/2009
The Chicago-based video game firm best known for making the popular Mortal Kombat game series, said it had about $281 million in debt and $167.5 million in assets.
"This was a difficult but necessary decision," said Midway chief executive Matt Booty.
"Midway enters this process with strong underlying fundamentals, as evidenced by solid fourth quarter sales that exceeded expectations in spite of a challenging retail and general economic environment."
"Overall, Mortal Kombat vs. DC Universe sales are approaching two million units shipped, TNA iMPACT! has shipped approximately one million units, and our Game Party franchise has sold close to three million units in total."
Midway expects Chapter 11 protection, which is routinely awarded by the court in such cases, to enable the company to continue US operations while it restructures, according to AFP.
Private investor Mark Thomas bought 80.3 million shares of Midway stock for 12 cents per share, getting Redstone’s entire 87.2 percent stake in the videogame maker, according to a Securities and Exchange Commission filing.
Redstone said he sold his controlling stake in Midway in a debt-slashing move.
"The creditor position was worth more than $100,000," said Michael Pachter, an Wedbush Morgan analyst. "This was a relatively safe path to making a lot of money."
