Midway Games Suffers a Fatality as It Files for Bankruptcy

2/16/2009
John Winn
Midway Games, the controversial video game publisher known for its line of "Mortal Kombat" fighting games, has suffered a fatality of its own as it is forced to file for Chapter 11 bankruptcy protection, Daily Variety has learned.

Having filed in a U.S. federal bankruptcy court last week, Midway said that the decision stemmed from a 1998 ownership deal that accelerated buyback requirements of two classes of debt the company's upper management did not believe would be fulfilled.

In a statement, Midway chief executive Matt Booty called the bankruptcy filing "a difficult but necessary decision."

The filing does not affect European operations, nor does it affect Midway's sales wing. However, it does open up the possibility of corporate restructuring, as well as audits of the company's balance sheet.

Midway stock fell 10 cents to 15 cents per share upon announcement of the move.

Last December, Viacom CEO Sumner Redstone sold his majority stake of the company--amounting to 87.5 percent--to private investor Mark Thomas.

While Midway is troubled, it isn't the only video game company to experience economic problems lately. In January, Eidos Interactive, the company behind the "Tomb Raider" series, filed for Chapter 11, citing poor sales brought on by poor reviews of its Tomb Raider: Underworld game in addition to the sluggish economy.

0
No votes yet
Your rating: None
  • |