The battle of Midway
Midway, the developer and publisher of video game classics such as Mortal Kombat and Gauntlet, looks set to be acquired by Warner Bros Entertainment for $33 million, after a bankruptcy court has approved the move, according to the Chicago Tribune.
The reason the bankruptcy court is involved is that the sale appears to involve the writing off of $40 million in debt from the company but the personal profit of $5 million for its current owner, Mark Thomas.
Thomas acquired Midway for $100,000 plus $70 million in debt from media mogul Sumner Redstone at the end of last year, and he wasted little time in moving the company into Chapter 11 bankruptcy protection on 12 February. The proposed acquisition by Warner was announced on 21 May.
The purchase price apparently covers Thomas's payment and secured creditors, but unsecured creditors seem to be out of luck. A group of Midway creditors sued Redstone over the sale to Thomas over the sale to Thomas in early May.
The deal encompasses Midway's development studios in Chicago and Seattle, but not the ones based in San Diego or Newcastle in the UK. These may have to be closed if a buyer isn't found.