Midway owner: Company's cash gone by June

Mark Thomas paints a bleak picture of his new acquisition for bankruptcy court; $30 million listed as highest bid for Mortal Kombat publisher.

When private equity investor Mark Thomas purchased controlling interest in Midway Games from Sumner Redstone's National Amusements last November, he also acquired the game publisher's debts to its parent company. Now that Midway has gone bankrupt, Thomas wants to ensure he's among the first creditors in line for repayment if the publisher is liquidated.

Even Midway's owner is selling a pessimistic view of the company.

As initially spotted by GamePolitics, Thomas (through his Acquisition Holdings Subsidiary company) filed a pre-hearing statement with the bankruptcy court late last month. In arguing for adequate protection on AHS's secured debt, the company also offered a number of insights into the publisher's precarious position. The AHS filing stated that at the rate Midway is burning cash, its reserves will be depleted by late June. Making matters worse, the publisher has no new major releases planned to arrive by then, so there's no expected influx of cash on the way.

Furthermore, AHS says that Midway has overstated the value of its assets, such that the total value of the company is not worth more than the amount of AHS's secured debt, some $30 million.

"While Midway did obtain a 2008 appraisal which purports to show substantial value for Midway's assets, an examination of that appraisal shows that it was based on unrealistic and unreasonable assumptions," AHS claims. "In any event, bids actually received by Midway for its assets show that that the appraisal is unreliable."

The filing indicates that Midway has received acquisition bids from a number of companies, with the highest bidder topping out at $30 million. The names of all bidders in the process were redacted from the transcript obtained by GameSpot.

Another point of note in the filing is that Thomas originally offered $1 million for Redstone's shares of Midway on November 20. However, after deciding that the risks involved with the company were higher than he'd originally considered, he revised the offer to $100,000 on November 24. The deal was eventually finalized on November 26.

98 Comments

  • CHILENO39

    Posted May 3, 2009 8:35 pm PT

    after acclaim its now midway's turn... RIP Mortal Kombat

  • cid_007

    Posted Apr 16, 2009 6:06 pm PT

    @combatsoldier: I agree. These kids are buying Wii's and claiming how great those "dumbed-down" games are. I'm an old-school gamer myself. You know what I did to support the cause...I bought Atari stock last year, when it was still public, because I believed in them, and that they would turn themselves around. And I still believe they will do it; although they were bought out internally, so it's not public anymore.

    Here's to the good ol' days: playing arcades, checking their slots for loose quarters, playing outside all day, playing Space Invaders and Donkey Kong for hours and not getting anywhere, and not having a care in the world! Huah!

  • combatsoldier

    Posted Apr 14, 2009 12:57 am PT

    You know whats really messed up. You can really tell the children from the adults. Some one like myself thats been playing midway games since arcade days in the early 1980's that loves midway and will supoort it always to the new breed of child gamers saying ridiculous things like epicfails etc. Show some respect you little kids. Midway has been around for over 3 decades so watch your mouth.

  • DPhunkT

    Posted Apr 13, 2009 6:29 am PT

    You have to question why this happened. Was it the management? Or the refusal to adapt to the appetites of gamers these days?

  • Kbs64

    Posted Apr 12, 2009 10:13 pm PT

    I hate to see old company's fall into this state.us I'm not a big Midway fan but when a old company starts to struggle like this. It makes me very sad!¡! What is to happen when Gaming Gods faulter & all is left is a memory of what was.

  • ChromeGrill212

    Posted Apr 12, 2009 9:20 pm PT

    man i was hoping for a new mortal kombat game to be made... i just hope a new company takes their place to continue mortal kombat

  • swiftstar183

    Posted Apr 12, 2009 4:44 pm PT

    Hey, maybe if they took the time to make good games, they wouldn't be in this mess... All the hype they had going for them with URT3, and they still dropped the ball!! "Only the Strong Survive, and the weak Shall Parrish"

  • Mr_Versipellis

    Posted Apr 12, 2009 11:56 am PT

    We knew this was going to happen...

  • dgsag

    Posted Apr 12, 2009 9:14 am PT

    Well, at least they published Unreal Tournament 3.

  • paullywog

    Posted Apr 12, 2009 9:10 am PT

    i hate to see a company go down, but what is the last good game midway made?

  • Extreme124

    Posted Apr 12, 2009 9:09 am PT

    They could never make a descent game anyway... great to see them go away soon

  • kiriyamaBRX

    Posted Apr 12, 2009 8:47 am PT

    Fatality.

  • Toro_Nev

    Posted Apr 12, 2009 8:20 am PT

    dam that sucks....

  • Gen007

    Posted Apr 11, 2009 10:51 pm PT

    stick a fork in em their done midway def hasn't made a good move since the days of the ps1.

  • thesand212

    Posted Apr 11, 2009 9:41 pm PT

    Mortal kombat goodbye

  • pai-may

    Posted Apr 11, 2009 8:26 pm PT

    Hope this equity investor prick gets burned if Midway do go down. Seve the fool right. Capitalism gone way wrong. Ha ha ha. damn shame for Midway though.

  • StillFreeTagger

    Posted Apr 11, 2009 4:57 pm PT

    @Koi-Neon-X: I'm not saying it won't be in good hands at Capcom or Namco. I just, as a fan of MK since the beginning, feel that it should remain in the hands of Ed Boon and his team.

  • Dead_or_Alive

    Posted Apr 11, 2009 4:29 pm PT

    Just port a better version Mortal Kombat Trilogy and the first MK on all next-gen platforms before you go, alright?

  • DarkNeoBahamut

    Posted Apr 11, 2009 3:40 pm PT

    no, no, noooooooooooooooooooo (.... it sounds familiar but can't remember.....anyway NOOOOOO)

  • SalarianChemist

    Posted Apr 11, 2009 1:49 pm PT

    Midway was a good company in their day, but they really did handle things incorrectly from the start of this entire generation.

    I hope the employees of Midway are able to find good jobs at other places.

  • jknight5422

    Posted Apr 11, 2009 7:29 am PT

    Uhm..April Fool's? :-/ Sad to hear about Midway going extinct.

  • hiryu3

    Posted Apr 11, 2009 6:09 am PT

    MK vs DC was their last hurrah and it wasn't even that good. sorry to see you go but thats what happens nowadays if your stuff isn't grade A and your money ain't right

  • MadGamer132

    Posted Apr 11, 2009 5:48 am PT

    you better do something.

  • SlayerX13

    Posted Apr 11, 2009 4:12 am PT

    I would like to think all the member of the Federal Reserve, Central Bank. and the Bank of the World for destroying our economy so they can continue their plans for world domination. Royalty isn't dead, They just where suits and run banks now. See you all at the FEMA camps!

  • skyler303

    Posted Apr 11, 2009 12:22 am PT

    RIP Midway.......

  • darkbuster_exe

    Posted Apr 10, 2009 9:48 pm PT

    Can't say I'm all that surprised. As soon as Acclaim went down, I knew Midway would probably be next . The economy just sped up the process

  • Shakezulah

    Posted Apr 10, 2009 9:44 pm PT

    Sad news. I've been playing their games for years and have very fond memories from them. They've made some of my favorite games of all time, most notably The Suffering series. Hopefully they can find some way out of this.

  • Erebus

    Posted Apr 10, 2009 9:38 pm PT

    A handful of people acquired wealth from the premeditated collapse of a company. On the books, that money was buried in costs such as advertising, marketing, R&D, and the like. In reality, the money was funneled into the pockets of a handful of very "sad" people who were "devastated" by the publisher's demise.

    All organized crime carries legitimate job-titles these days.

    Read the available articles surrounding Midway's history.

  • coaltango

    Posted Apr 10, 2009 7:54 pm PT

    it breaks my heart to hear this sad story of midway.i hope they survive this hard time & make a smash hit Mortal Kombat.

  • NoLifeGamin posted Apr 10, 2009 7:19 pm PT (does not meet display criteria. sign in to show)

    NoLifeGamin

    Posted Apr 10, 2009 7:19 pm PT (hide)

    MIDWAY-EPICFAIL!

  • GeigerdolylWodd

    Posted Apr 10, 2009 6:49 pm PT

    Coco_pierrot
    Posted Apr 10, 2009 5:56 pm CT

    You all forgot that midway also make Unreal games ... It is sad that midway will be gone but their might see better production elsewhere.

    Actually that's Epic games' franchise Midway's the publisher they chose to help them bring it to consoles though.

  • GeigerdolylWodd

    Posted Apr 10, 2009 6:43 pm PT

    The filing indicates that Midway has received acquisition bids from a number of companies, with the highest bidder topping out at $30 million. The names of all bidders in the process were redacted from the transcript obtained by GameSpot.


    $30 million really? They should have gone with that bidder hindsight's 20/20
    Assuming they weren't bidding on their selves.


    Another point of note in the filing is that Thomas originally offered $1 million for Redstone's shares of Midway on November 20. However, after deciding that the risks involved with the company were higher than he'd originally considered, he revised the offer to $100,000 on November 24. The deal was eventually finalized on November 26.


    So he didn't put that much into Midway to begin with. You reap? What you sow. Now had he stayed with the $1 Million he might have seen some return on it.

    But this is robbery really when you take a step back and look at the facts. Granted Midway isn't exactly innocent here either they've milked their cash cow to the bone with the Mortal Kombat franchise.

    Still if they could have held out till Wheelman's release, (and perhaps they could have if he stayed with the initial $1 million and not the mere $100,000 bucks). Perhaps if he did then they could've stayed afloat.

    He should get no more than $100,000 back as well as how ever much he's paid to remove their debts and not a penny more. Again you reap what you sow.

    There shouldn't be any interest awarded to him since he had none to begin with as is inferred by the fact that he only gave a tenth of what he originally offered before the closing of the deal.

  • neock2003

    Posted Apr 10, 2009 6:42 pm PT

    I't's sad to see Midway gone, but they have not made an good game since MK2.

  • tearo

    Posted Apr 10, 2009 6:36 pm PT

    OH AND THE SUFFERING SERIES!

  • tearo posted Apr 10, 2009 6:35 pm PT (does not meet display criteria. sign in to show)

    tearo

    Posted Apr 10, 2009 6:35 pm PT (hide)

    Let midway burn!

    BUT SAVE MORTAL KOMBAT!

  • Zoomer30

    Posted Apr 10, 2009 6:27 pm PT

    Midway 19??-2009

    Another in a long line of video game vets goes down in debt fueled flames.

  • ldonyo

    Posted Apr 10, 2009 4:40 pm PT

    That's what happens when you worry more about bonuses than you do about the games you publish.

  • johnrkinsey1

    Posted Apr 10, 2009 4:28 pm PT

    The company needs cash fast. Too bad they did not release every old title under the sun for Xboxlive or PSN. Too bad they did not sell famous ring tones (I'm still looking for a quality ring tone for Scorpions "Come Here!" and "Get over here!"

  • pamplinas322

    Posted Apr 10, 2009 4:20 pm PT

    More bad news for midway.

  • Coco_pierrot

    Posted Apr 10, 2009 3:56 pm PT

    You all forgot that midway also make Unreal games ... It is sad that midway will be gone but their might see better production elsewhere.

  • AlucardsFate

    Posted Apr 10, 2009 3:37 pm PT

    Normally...

    I'd be sad to see a publisher go...but I can't really think of anything Midway has done in the recent past that I played or liked...

    Mortal Kombat died with the "meh" MK3...

  • scabsandashes

    Posted Apr 10, 2009 3:14 pm PT

    did vin diesel arise from the grave to release 2 games and an old movie simultaneously or something too bad i hate you son, lay back down.

  • Gamer4Iife

    Posted Apr 10, 2009 3:00 pm PT

    I guess this is goodbye, Midway. I'll miss you.

  • XanderZane posted Apr 10, 2009 2:52 pm PT (does not meet display criteria. sign in to show)

    XanderZane

    Posted Apr 10, 2009 2:52 pm PT (hide)

    DeadManRollin

    No PC games = death. *******************************************************
    They would have died 10x's faster if they made Pc games, I can guarantee you that. Less people would have bought that crap for the PC. Their best games were NFL Blitz & Morkat Kombat. Games like "The Suffering, NBA Ballers and Strangehold were just average. I still hope they released "This is Vegas." I'm curious to see how that game turned out.

    There is Midway's list of games. http://www.midway.com/us/AllGames.php

  • MrFinalFantasy

    Posted Apr 10, 2009 2:50 pm PT

    MIDWAY. oh wait! Shadow Hearts! RPG! i actually like that game. pity they sank.

  • XanderZane

    Posted Apr 10, 2009 2:43 pm PT

    Mark Thomas is a idtiot. Why would you buy controlling interest ina company that was sinking fast? That's like someone buying the Titantic after it got a hole in it's hull. Midway had been going downhill for the last 2 years. The only thing that has kept them from bankruptcy was a few titles being released during the holidays that made them a little bit of profit. I have a friend who used to work at Midway doing game testing and he said it sucked. Playing crappy games all day for a living isn't fun. They never got to pick what games they wanted to test and he said he always got the worse. Midway was a good company a couple generations back, but like Acclaim, they will be gone in within the next year or so, unless a larger company purchases them.

  • maverick_76

    Posted Apr 10, 2009 2:26 pm PT

    Somebody has issues........

  • maverick_76

    Posted Apr 10, 2009 1:48 pm PT

    Although I am not a huge fan of Midway, this is a terrible thing for all gamers. I used to love Blitz, and NBA Jam, the problem is Midway stayed in the past for too long. MK vs.DC was the first good game they released in a long while. I hope that their IP's can be resurrected at some point and that some new life can be injected into them.

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