Tag Archives: midway bankruptsy

Warner Bros. became the lone bidder for Midway this past Wednesday, reports the LA Times.

“No other bids came in, so there’s not going to be an auction,” said Geoff Mogiln, a spokesman for Midway.

Mortal Kombat, Spy Hunter, Joust, Wheelman and other Midway properties are part of the deal with Warner, along with two of development studios. Two other studios and the rest of the company’s assets are still up for sale.

There are still some hurdles to cross before Warner can plunk its $33 million down for the company. One such hurdle happens to be legal issues surrounding a contract dispute over Vin Diesel’s image and voice  in Wheelman.

The next court date is July 1, so more news about the merger is expected then.

Via IGN.

Midway’s Newcastle and San Diego studios may have to close up shop in two weeks if a buyer or investor is not found for the open-world game currently in the works.

“100 percent of my efforts and focus are on finding a solution to keep the studio going forward, making it viable and securing jobs in the team,” Newcastle boss Craig Duncan told the Guardian. “It may sound like a football cliché but this studio is too good a team to have to shut down – it would be a travesty.

“I met with a number of interested parties [during E3]. When we presented the new game everyone loved it and was really impressed with our proposition. What counts against us is the timeframe and the fact the market is tough currently for both investors and games companies.

“If I had £100k for every time someone said, ‘a year ago we would have bought you’, I could buy the studio personally.”

The two studios were not included in the bid $33 million bid Warner Bros made for Midway back in May.

Via CVG.

Creditors are suing several parties involved in the recent bankruptcy and original sale of Midway, including Mark Thomas, and Sumner Redstone along with his daughter Shari and his holding company, National Amusements.

The lawsuit stems from what the creditors called a “breach of fiduciary duty, corporate waste and unjust enrichment” pertaining to the financial crisis within the company. The suit states that the current situation “arises out of a series of disastrous and ill-advised financial transactions that largely occurred during 2008.”

According to a 29-page document filed by the creditors, Midway’s board turned a blind eye to the sale of the company and wasteful spending by having “either approved of the transactions or, upon learning of them, looked the other way — taking no steps to investigate and unwind them.”

Redstone’s sale of Midway to Mark Thomas for $100,000 was described in the document as not only a shady deal, but as nothing more than a “massive tax refund” to Redstone which left Midway “insolvent” since 2007.

Loads of accusations there.

Gamsutra’s got the rest of the details. Go have a look.

Midway is awaiting court approval to hand out monetary incentives from a pool containing up to $600,000 providing it can sell the company for $30 million, reports Gamasutra.

Two goals for the company include the $600,000 reward pool, the other to pay key personnel $1 million once the sale closes.

Midway determined these bonuses by “the level of payment that is necessary or appropriate to provide an economic incentive for each Participant to exert additional efforts beyond his/her normal duties on behalf of the Company.”

More through the link.

Mark Thomas, the owner of Midway, filed a document with the to US Bankruptcy Court last week that reveals the company will run out of cash by June.

GamePolitics got hold of the 44-page document, and this is what was discerned:

• Midway will run out of cash in late June
• Midway has no games set to launch in that window that might provide an influx of cash
• Midway overstated the value of the Mortal Kombat franchise
• Midway has operated at a loss for most of the last decade
• In 2008 CitiGroup failed to find anyone interested in acquiring Midway
• Mark Thomas initially offered $1,000,000 for Midway but lowered his offer to $100,000 after re-assessing the risks; by necessity, the deal was finalized quickly and Thomas says that he did not have time to conduct normal due diligence.

Due to confidentiality, some parts of the filing were redacted, failing to shed light on Midway overvaluing the Mortal Kombat series, the list of companies that bid on Midway or how Sumner Redstone benefited from selling it off to Thomas so cheaply.