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U.S. Bankruptcy Judge Approves Midway Liquidation
U.S. Bankruptcy Judge Approves Midway Liquidation
May 24, 2010 | By Kris Graft

May 24, 2010 | By Kris Graft

A U.S. bankruptcy judge on Friday approved a liquidation plan for defunct game publisher Midway Games that will partially reimburse creditors from Midway's 2009 sale to Time Warner, Bloomberg reported.

Midway filed for bankruptcy in February 2009 following years of financial losses. In July that year, Warner moved in to buy Midway's Chicago and Seattle studios, along with U.S. assets including the Mortal Kombat franchise for $33 million.

Judge Kevin Gross said he was "satisfied fully" with Midway's liquidation plan. The report said there is around $34.7 million available to creditors. Unsecured noteholders who are owed around $155 million will be reimbursed $25.5 million, a 16.5 percent recovery.

Unsecured creditors owed around $36.7 million will be reimbursed approximately $9.2 million, a 25 percent recovery.

In May last year, Midway creditors sued former Midway majority stakeholder and media mogul Sumner Redstone and former Midway chair Shari Redstone, his daughter, along with Midway board members over the late-2008 sale of the company to investor Mark Thomas.

Creditors settled with Thomas a few weeks later, but continued the suit against the Redstones and board members. Judge Gross dismissed most of the remainder of the suit against Redstone and his company National Amusements in late January this year.

A lawyer for Midway told Bloomberg that Redstone's company National Amusements agreed to pay around $1 million to the liquidating trust in return for dropping the lawsuit.

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