Midway Files For "Reorganization"
Most veteran gamers will feel a pang of sympathy when they read this, primarily because Midway was always a cornerstone of the gaming industry. Thankfully, though, Chapter 11 doesn't spell immediate disaster in the big business world. In fact, Midway simply sees this as a "necessary step."
As Yahoo Finance reports, Midway Games has announced that "the company and its U.S. subsidiaries filed voluntary petitions in the U.S. Bankrupty Court for the District of Delaware for reorganization under Chapter 11 of the U.S. Bankruptcy Code." This doesn't include overseas operations, and the company attributes this move to the recent change in ownership, which "accelerated repurchase obligations relating to two classes of Midway debt." The good news is that this "reorganization" process may allow the company to come out clean on the other side, and maybe they can get back to producing solid entertainment products. Said Midway Chairman, President and CEO Matt Booty:
"This was a difficult but necessary decision. 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."
Booty added that Midway goes into the restructuring "with strong underlying fundamentals, as evidenced by solid fourth quarter sales;" let's not forget the success of Mortal Kombat vs. DC Universe, which has shipped over 2 million copies worldwide. So this certainly isn't the last you'll hear from Midway, but they do have to work through a few snags before everything returns to normal...and it could take a while, too. Just don't go away, Midway! We kinda like having you around.
2/12/2009 Ben Dutka