Redstone, ex-Midway exec subpoenaed

Former majority shareholder Sumner Redstone and ex-chairwoman Shari Redstone court-ordered to answer questions about $100,000 mystery buyout.

by

Bankruptcy is a messy process in the best of cases, but it appears to be particularly ugly for Midway Games. After media mogul Sumner Redstone sold his controlling share in the publisher last December--valued at $30 million--at the bargain-basement price of $100,000, Midway's creditors called in the company's debts to the tune of $240 million.

Batman represents Midway's creditors.

Unable to secure that much cash, Midway filed for Chapter 11 bankruptcy protection last month. Meanwhile, Midway's debt holders have been vocal with their complaints about the transfer in ownership that started the company's downward spiral in the first place, saying that the suspiciously inexpensive sale price suggests that there was some insider dealing between Redstone and the new majority owner, Mark Thomas.

Now Redstone and his daughter, former Midway chairperson of the board Shari Redstone, have been subpoenaed in the publisher's bankruptcy proceedings. As reported by Game Politics, the company's unsecured creditors are ordering the pair to be deposed later this month. They're also demanding copies of all communications that the pair had with Thomas, as well as documents relating to the sale prepared for National Amusements and Sumco, two companies in which Sumner Redstone has a management stake.

Since the transfer in ownership to Thomas, Midway has seen its chairman of the board step down citing "personal reasons," sold off the distribution rights to its long-in-development Wheelman game starring Vin Diesel, and prepared bonuses should it sell the proverbial farm, its company-defining Mortal Kombat franchise.

Full disclosure: Sumner Redstone is founder and executive chairman of CBS Corporation, owner of CBS Interactive, GameSpot's parent company.

Discussion

18 comments
JoeTheFunk
JoeTheFunk

vivendidoom: it's common 'sense', you plum.

AtlanticRock
AtlanticRock

Dale Denton: "You've been served by the best my friend..."

vivendidoom
vivendidoom

Dunno if i agree chimera, yeah i don't think midway should tank, but i do think that redstone did not see this one coming either. He may be good at money, but he is not good at common sence, its just not in his gene pool. These days, buying yourself out of trouble could actually get you killed. This trial just might mean a change in head honcho for viacom. But if anything, they should knock sir ED BOON off the company, link themselves with rareware (if they get out of the financial whoa,) and start heading the next stage in Killer Instinct. But thats shooting for the stars. If anything, This is GOOD news for Midway, cause if i was an employee for them right now, I would be ecstatic for this. They need closure, and they need to show that what redstone did is unacceptable by selling shares for a minamal amount, just because something may have come up.

AnarchyRising
AnarchyRising

I agree with chimera. Since he is so rich, nothing major will happen to him (if anything) if he did anything wrong. Define wrong when your a bajillionaire... wrong is only what you "can't" buy yourself out of.

NoDice_386
NoDice_386

How about Babality? Also, who cares? Midway sucks. Let them tank.

chimera01
chimera01

meh, no big deal. sumner redstone is a bajillionaire, and can literaly afford to have actual mk characters come to life for his legal representation. not only is he head of CBS, but is major shareholder of viacom. which is a huge media conglamirate(mtv, and at least one or two tv and radio stations in just about every us market). the guy is a financial genius,and even if he did anything wrong, he can afford to not even get a stern talking to. Midway hasn't done jack in years. sure, theyre behind some legendary arcade titles from the 80's, and have been riding the mk gravy train. which has seen a steady decline since the late 90's. redstone isnt stupid,which is why he got out at his buying price many years earlier. hes washed his hands of the deal,now we get to waste some more tax dollars in a useless hearing.thats it. now whos going to post "fatality!" or "finish him"? it will be both witty, and original.

zodi
zodi

Whether they get to the bottom of it or not. There had to be some insider deal, no one sells a 30millon dollar stake for $100K. Someone new something in either the not so distant future or was already underway. Never believe the news or analysts, a company will only disclose what they have to and thats only 50% of the time

GreggD
GreggD

FINALLY. Justice!

Pete5506
Pete5506

I hope someone good gets MK

Guzthon
Guzthon

Okay Redstones, you're GONNA PAY WITH YOUR LIVES (IN PRISION) for ruin Midway and their franchises!

Syntax82
Syntax82

@Fightingfish18 Read the news abit before you comment, Midway was not in finicial danger before Redstone sold their stock. The company was not balling out of control by any means but they had revenue for new projects and such. Redstone got the compnay for 100,000 which means he paid 1/31 of cent pre share. If Redstone needed money why wouldn't he try to sell the company for what it was at least worth? Also the bankruptcy stems from debts being called a DECADE (read the SEC filings) before they would be due. Midway may not have put out the best games but they were keeping their heads above water.

hatieshorrer
hatieshorrer

A 30million dollar company indebt by 240million dollars. Im amazed it even sold for $100.000. According to these numbers Redstone should have payed some to take Midway.

stevenrkorea
stevenrkorea

Hahahaha. Insider trading? I could have told you Midway was going under 2 years ago.

fightingfish18
fightingfish18

I dont think it was insider trading. We heard that Midway was hitting the fan BEFORE we heard that redstone sold most of it for a measley 100k. Fact of the matter is, it's their money and if they wanted to sell midway, they can do it.

Darth_Nater307
Darth_Nater307

lol at Batman picture. To bad I don't know crud about bankruptcy & what not. I just want to hear that Midway made it through, still in possession of the MK franchise.

living_wmd_888
living_wmd_888

The Redstones gutted Midway with crooked tactics. Midway may not have been as big as Actiblizzard, but they were doing all right until the Redstones pulled all these under-the-table deals.