In order to avoid defaulting on an estimated $240 million in debt, Midway Games and nine affiliates today filed for Chapter 11 bankruptcy protection in a Delaware court. According to the company, only their U.S. operations will be affected.
"This was a difficult but necessary decision," said Midway Chairman, President and CEO Matt Booty, in a press release this morning. "We have been focused on realigning our operations and improving our execution, and this filing will relieve the immediate pressure from our creditors and provide us time for an orderly exploration of our strategic alternatives. This Chapter 11 filing is the next logical step in an ongoing process to address our capital structure."
According to court documents, Midway's Austin and Los Angeles studios, as well as "This Is Vegas" developer Surreal Software are among the affected companies.
Though Wells Fargo Bank is by far the largest creditor at $150 million, Midway also owes $40 million to its new majority shareholder Mark Thomas; $20 million to former majority shareholder Sumner Redstone's National Amusements; $17 million to NBA Properties; a disputed $6.7 million to Warner Bros. Interactive Entertainment, and $1.975 million to Epic Games, presumably for licensing their Unreal Engine.
You can view the full court filing in PDF form right here.
Thu, Feb 12, 2009
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