Midway Games (NYSE: MWY) has filed for Chapter 11 bankruptcy protection.The video game company has been battling a massive debt load and poor financial results for the better part of a decade, but what finally sealed the company's fate was Sumner Redstone's sale of his 87% stake in the company to investor Mark Thomas. That change-in-control triggered a clause allowing noteholders to call the company's loans -- which the company expects they will.
"This was a difficult but necessary decision," CEO Matt Booty said in a press release. "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. This Chapter 11 filing is the next logical step in an ongoing process to address our capital structure."
Midway Games was founded in 1958 as a manufacturer of amusement park equipment, and gained an important place in video game history when it brought Space Invaders and Pac-Man to the United States and later enjoyed more success with Mortal Kombat. But the company's financial problems have made it less relevant in recent years. Midway had about 500 employees going into the bankruptcy filing. The bankruptcy filing will allow the company to continue to operate. Without the $337 million debt load, Midway and its catalog could be an attractive acquisition for the right competitor. Of course, it's far too late for the company's stockholders.
Black Friday expected to be strong, no promises for Christmas
Will JPMorgan chief Jamie Dimon be our next Treasury Secretary?
Gold surges to another new high of $1167 per ounce
