Midway Sings Swan Song

It looks like the company known as Midway is sun setting, soon to fade away forever. On May 21, U.S. Bankruptcy Court Judge Kevin Gross approved a liquidation plan that will see Midway pay back less than 16.5 percent of debt owed to "unsecured noteholders" and 25 percent of what is owed to "unsecured credit holders."

Midway filed for bankruptcy protection in Feb. of 2009, and managed to generate some $33 million in cash from the sale of assets like Mortal Kombat to Warner Bros. (a Time Warner company). In May of 2009, Midway's creditors sued former Midway majority stakeholder Sumner Redstone and his daughter - former Midway chair Shari Redstone, and Midway board members over the 2008 sale of the company to investor Mark Thomas. Thomas settled with creditors quickly, but Redstone and associates did not. That lawsuit continued until Feb. of this year, when the same bankruptcy judge dismissed the Redstone portion of it.

A lawyer for Midway told Bloomberg that Redstone's National Amusements agreed to pay approximately $1 million USD into a "liquidation trust" in return for the dismissal of the lawsuit.

Unsecured creditors walk away with about $9.2 million (owed about $36.7 million collectively) and unsecured noteholders (owed about $155 million) will be paid $25.5 million.

Source: Bloomberg via Gamasutra