Saddled With Debt, Midway Games Files For Chapter 11 Reorg
This story was written by Tameka Kee.
Trying to get out from under roughly $150 million worth of debt, Midway Games filed for Chapter 11 bankruptcy this morning. The filing only covers the Chicago-based publisher's U.S. operationsnot its holdings in Europe. New CEO Matt Booty said the move would "relieve the immediate pressure from our creditors" and give the Mortal Kombat publisher more time to get its books in order and explore other options.
The filing was triggered in part by Sumner Redstone's sell off of National Amusement's majority stake in the company in December; the fire sale triggered provisions that allowed Midway's debtors to ask for full repayment, and would have also forced the company to buy all its shares back from the new owner. With only about $10 million on the books, Midway was ultimately going to default. The company petitioned for a few weeks to delay repayment, but the Chapter 11 gives them much-needed breathing room. Release.
By Tameka Kee