On Thursday, Midway Games announced it was filing for Chapter 11 bankruptcy protection, according to the ASSOCIATED PRESS (via VARIETY). The game developer, best known for its MORTAL KOMBAT franchise, said the filing originated from a change in ownership in late 2008 that led to an accelerated buyback requirement related to two classes of debt they did not think they could meet.
Media mogul Sumner Redstone dumped his majority share in Midway in December to a company led by private investor Mark Thomas, earning interest of about 87.2 percent. In a statement to the press, Midway's CEO and President Matt Booty said the filing was a "difficult but necessary decision. 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," he said.
The filing does not include foreign-based operations, which will continue to operate as normal. Midway and its U.S. subsidiaries filed voluntary petitions in U.S. Bankruptcy Court in the District of Delaware and were seeking several first-day motions so that it can continue normal operations.
