Tag Archives: shari redstone

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.

Sumner Redstone and his daughter Shari have been subpoenaed by the US Bankruptcy Court of Massachusetts over the sale of Midway shares to Mark Thomas.

Thomas purchased the Redstones’ share in Midway for $100,000, inheriting a $70 million debt with it.

His reasoning for accepting those terms was due to $30 million of the debt being secured, meaning he was to be paid before bondholders — who were owed $150 million by Midway.

The subpoena document states: “The cash collateral order places a clear emphasis on insiders getting paid before and, potentially, at the expense of the estates and their creditors.”

Both Sumner and Shari Restone are due to appear in court this month for deposition and to provide documents pertaining to the sale.

Mark Thomas hasn’t been called.

Court documents posted through the link.