whats with the midway hate there games were pretty good. until dead space came along bankruptcy is what ea deserved with the crap they were pumping out prior to dead space. dead space is the first game by EA i have enjoyed.
Midway creditors sue old, new owners
By
Brendan Sinclair, Senior Editor
Bankruptcy proceedings get uglier with allegations of improper conduct leveled at Sumner Redstone, Mark Thomas over $100,000 sale of controlling interest in publisher.
Just days after Midway Games filed for bankruptcy, a number of its creditors filed a formal objection to the November 2008 sale of controlling interest in the company for the bargain-basement sum of $100,000. That deal saw media mogul (and executive chairman of GameSpot parent company CBS) Sumner Redstone sell his 87 percent stake in the Mortal Kombat publisher--valued at $30 million--to Mark Thomas, along with millions in secured loans that Sumner had made to the publisher through his National Amusements Inc. holding company.
Now the creditors have gone beyond their initial objection and outright sued Redstone, Thomas, and the Midway board of directors. At the heart of the dispute is the sale, which creditors say "caused Midway irretrievably to lose the ability to take advantage of its valuable accumulated net operating losses and other tax assets." In other words, the publisher was robbed of its losses.
According to the complaint (filed as part of Midway's bankruptcy proceedings), Redstone's sale of Midway resulted in more than $700 million in tax losses that would offset his taxable income and entitle him to refunds. Those offsets could have been attractive to a potential buyer of Midway, but with the company's value effectively set at $100,000, the suit states that the publisher lost the ability to claim them in a restructuring or sale.
As the controlling shareholder in the company, Redstone owed a fiduciary duty to Midway and its creditors, the complaint alleges, one that he violated by acting solely in his own interest at the expense of the company and the debt holders. Meanwhile, Thomas (who the suit describes as "an individual of relatively limited means and sophistication") is alleged to have purchased the publisher "for the sole and exclusive purpose" of collecting on millions in secured loans that National Amusements had made to Midway prior to the bankruptcy.
A spokeswoman with National Amusements told Bloomberg News, "This suit is completely without merit. The conduct of Mr. Redstone and NAI was entirely proper, and we strongly disagree with any suggestion that Mr. Redstone or NAI breached any fiduciary duties."
By
Brendan Sinclair, Senior Editor
Brendan Sinclair has been a games journalist since 1999. His tastes are eclectic, though he has a definite affinity for games with arcade roots. He's Canadian, but has also been at home in Atlanta, Austin, Chicago, and San Francisco.
27 comments
So long Midway, was really hoping they would make it through and pull out of the slump, but it seems that no matter what, Midway is dying.
Something is sour with this whole thing. The people involved may have planned out all of the loopholes that make it a legal. That's shady, but if the system lets them get away with it; what can anyone do? _
A bunch of very rich people arguing over who is entitled to a massive loss so they don't have to pay tax for several years.
It seems inevitable that the corpse of Midway is going to be torn apart by the jackals of its creditors. So long Midway and thanks for the memories.
Umm.....this story just keeps getting weirder every time a new development is posted......Are Midways creditors retarded or something??
It's sad it's come to this for Midway, who was one of the pioneers of gaming's early years.
JunoFallon Posted May 13, 2009 2:11 pm CT Wow. This is getting ridiculous.
No, its getting ugly and fast
Midway made nothing worthwhile for the PC anyway... no big loss in my book. In today's gaming industry you either make a solid, engaging, high quality product or you release crap, make a bad name for yourself and slowly fade and die. It's survival of the fittest and while it doesn't provide much room for the gaming companies to experiment with new formulas and ideas, it does ensure they will release quality content if they wish to survive. Do a recap of the top PC games from the past 2 years and you will find many similar qualities like outstanding graphics, functional UI, enjoyable playability, engaging storyline/dialogue, excellent audio, etc. Midway should have been taking notes... - Ice
I wouldn't say that Midway is done. Kotaku mentioned a while ago that Ubisoft and Warner Brothers are both interested in acquiring Midway. Even if they do fade away, a lot of the spirit lives on in Raw Thrills, Eugene Jarvis' game devhouse.
How about just putting MKT on XBLA, PSN, and Wiiware before the company completely goes under?
In a nutshell: Filing bankruptcy allows Midway to keep their assets that they own while having unpaid debts on their ledgers and even income loss. Without this legal debt protection, the "Creditors"(people that Midway owns $$ to) could forcibly take control of the company's assets and sell them off in order to satisfy the debts that they are owed. Think of bankruptcy as "Passing Go & collecting $200". Midway is able to sell their properties and/or company to whomever they wish, and that person/company will have to eat the negatives on their books, and no one has to consult with the creditors about this. Usually in a case of corporate bankruptcy a federal judge will determine who gets what as far as money owed. These creditors seek to prevent MIdway from taking refuge under U.S. bankruptcy protection laws.
Midway ..... NOOOOOOOOOOOOOO Dont goo Iove your old games MK and alot of other games ..... :(
"An individual of relatively limited means and sophistication." Ouch! Nothing like legal battles gettin' personal. While we're on the subject, can I sue for psychological damages caused by playing any Mortal Kombat game after the second one?
Midway should of been buried a long time ago. They make few name worthy games and even the games they publish are not that good really.
This happens a lot, they're just buying Midway as a purse. Midway's done, it only surprises me how long they managed to stick around.
Conversation powered by Livefyre
Hot Stories
Newsmakers
-
Preowned games on Xbox One decided by publisher
Microsoft confirms that it won't charge any fees for any titles eligible for resale. Full Story
- Posted Jun 7, 2013 12:00 am GMT
-
Microsoft confirms required 24-hour check-in for Xbox One
Playing Xbox One games on somebody else's console will also require a check-in every hour. Full Story
- Posted Jun 6, 2013 11:41 pm GMT
Featured Stories
-
PlayStation 4 will cost $399
Sony confirms a $399/€399/£349 price for the PlayStation 4 hardware, $100 cheaper than Microsoft's Xbox One. Full Story
- Posted Jun 11, 2013 7:19 am GMT
-
New Halo coming to Xbox One; runs at 60fps
Will be coming in 2014. Full Story
- Posted Jun 10, 2013 7:11 pm GMT
-
Del Toro calls BioShock Infinite a 'mindf*ck'
Pan's Labyrinth director praises Ken Levine and Irrational Games for latest BioShock, says he would consider large-scale Pacific Rim game "God willing." Full Story
- Posted Jun 13, 2013 4:53 pm GMT
-
Microsoft: Xbox One will be leading product people love and embrace
Xbox boss Don Mattrick believes concerns over connectivity are overblown, recommends Xbox 360 for those without an Internet connection. Full Story
- Posted Jun 12, 2013 1:52 am GMT
-
New Mirror's Edge is open-world
EA Labels boss Frank Gibeau describes new project as "open-world action adventure game." Full Story
- Posted Jun 12, 2013 6:45 pm GMT
Submit News
Related Game
Related Games
Recent News
-
Sony on why it won't hinder PS4 used games--flexibility creates value
PlayStation boss Jack Tretton says ability to freely resell games creates value in the initial purchase; PS4 won't require online check-in because many...
