Mortal Kombat devs planning Midway exodus?

What we heard: Midway is in dire financial straits, having filed for Chapter 11 bankruptcy in February because creditors had called in $240 million in debt. One way the publisher hopes to overcome its indebtedness is through the controversial sale of its assets and gaming properties, the most lucrative of which is Mortal Kombat. However, even if Midway retains the violent fighting franchise, it might be losing the talented team that has been developing it.

Citing unnamed sources within the company, Kotaku reported over the weekend that the Mortal Kombat team--which is said to comprise some 50 developers--is in discussions to leave Midway and form up under a new publisher. Senior members of the Mortal Kombat management team are reportedly in the process of negotiating with other publishers a deal that would carve out space for a new studio.

According to Kotaku's sources, the Mortal Kombat team harbors a number of qualms with Midway, the most pressing of which relates to unpaid bonuses owed to the developers after Mortal Kombat vs. DC Universe hit its sales targets. Speaking to Kotaku, Midway representatives addressed this issue, saying, "Midway is not refusing to pay out those bonuses. It's the unsecured creditors committee that is refusing to allow us to pay them. They're the ones holding that up."

The gaming blog's source also said that the Mortal Kombat team has become increasingly "frustrated" over Midway's handling of the recent bankruptcy filing. The source said that Midway's ability to release quality titles on schedule outside of the Mortal Kombat team has been a sticking point for the developers, as well.

The official story: Midway provided no further comment to GameSpot.

Bogus or not bogus?: Too early to say, but given Midway's current financial straits, it seems entirely plausible that the Mortal Kombat team would be looking for a way out.