Midway Games files for bankruptcy protection

[nekrosoft13]

NEW YORK — Midway Games Inc. filed for Chapter 11 bankruptcy protection Thursday because it doesn't expect to be able to pay back accelerated debt obligations stemming from media mogul Sumner Redstone's sale of a majority stake in the company.

Midway, best known for the Mortal Kombat video games, had about $281-million (U.S.) in debt and $167.5-million in assets as of Sept. 30, according to its bankruptcy filing.

In December, Mr. Redstone sold his majority stake in Midway – an interest of about 87.2 per cent – to a company led by private investor Mark Thomas.

In a statement Thursday, Midway Chief Executive and President Matt Booty, who took the company's helm last month, 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 in a statement.

The company announced in December it is laying off 25 per cent of its work force, or about 180 people, and closing a studio in Austin, Texas, to cut costs.

Midway's filing came the same day Japanese video game maker Square Enix Co. offered to buy Britain's Eidos Interactive Ltd., the publisher of the Tomb Raider series, in a deal valued at £84.3-million ($121.7-million). The offer signals there may well be market out there for video game companies even in the current economy.

“Midway's intellectual property compares quite favourably to Eidos,” said Wedbush Morgan analyst Michael Pachter, adding that if a buyer is willing to pay such a price for Eidos “one would think” they'd be willing to pay for Midway.

It is in the best interest of Midway's creditors, the analyst added, to keep the company a going concern. Midway's Chapter 11 filing means it plans to keep operating — a Chapter 7 filing would have meant it wanted to liquidate.

Midway joins a long line of once-mighty video game publishers filing for bankruptcy. Acclaim Entertainment and 3DO Co., both publicly traded, filed for bankruptcy earlier this decade, but unlike Midway they liquidated their assets. Eidos, meanwhile, had managed to stay in business only to find a buyer Thursday.

Midway and its U.S. subsidiaries filed voluntary petitions in U.S. Bankruptcy Court for the District of Delaware. The company 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.

http://www.theglobeandmail.com/servl...echnology/home

[EciDemon]

It's a shame, but I don't think they have done anything good in a long while..

[BioHazZarD]

nah not at all..no suprise here.

[evox]

Poor Midway, can't catch a break. Reminds me of AMD's CPUs...

[EciDemon]

I think if they made the MK vs DC a real MK game as in the past with lots of contents and unlockable characters it would have sold better. It felt like such a huge step back.

[nekrosoft13]

MK turned to crap once it went 3D, 3D fighting games are fine, but MK just doesn't feel right.

[NarcissistZero]

I liked the first 3D MK... what was that, MK4? That was when I liked fighting games... I really can't stand playing them anymore.