Oh, how the mighty have fallen. Midway Games, once home to classic titles like Mortal Kombat, Spy Hunter, and NBA Jam, is currently in the throes of bankruptcy. The company recently won court approval of its liquidation plan to provide creditor recovery.
Kevin Gross, U.S. Bankruptcy Judge, said he was “satisfied fully” with the plan prior to approving it last Friday.
Midway remains a shell of its former self, having already sold off most of its assets to Warner Bros Entertainment. These assets included the Mortal Kombat franchise and development studios in Chicago and Seattle. Midway gained about $49 million from the sale. THQ picked up Midway San Diego, while Midway Newcastle was relaunched as Atomhawk.
Under Midway’s plan around $34.7 million is available to creditors. Unsecured noteholders will receive $25 million, out of the total $155 million that they are owed. Unsecured creditors of subsidiaries will get $9.2 million, a recovery of 25% out of the $36.7 million in claims.
Midway filed for bankruptcy in February 2009 after Sumner Redstone, Chairman of CBS and Viacom, sold his 87% percent stake in the company. Midway’s unsecured creditors committee sued Redstone, saying that Midway was hurt by the sale. Judge Gross dismissed that suit in January of this year.
