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Times are hard seems to be the saying quite often no a days. Lay-offs left and right. Well this is some shocking and not so shocking news depending on if you follow the news around Midway.
For a while now, they have been trying to stay above water and pay back all of their losses and debt. But it looks like they just couldn't keep up even though they put up a good long fight. Today they have announced that they are filing Chapter 11 Bankruptcy for the U.S. division of the company. On the bright side, yes there is a bright side, this will not effect the non-U.S. based operations. On top of that, they expect that Chapter 11 protection will enable the company to conduct its business as usual so they can restructure the company. So hopefully this will not lead to further lay-offs.
Midway's European operations are unaffected and continue business as normal
CHICAGO – February 12, 2009 – Midway Games Inc. (NYSE: MWY) today announced that the company and its U.S. subsidiaries filed voluntary petitions in U.S. Bankruptcy Court for the District of Delaware for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The filing does not include the company's non-U.S. operations, which will continue business as normal.
In its filing with the Bankruptcy Court, the company cited that the November 28, 2008, change in ownership triggered accelerated repurchase obligations relating to two classes of Midway debt, which Midway anticipated it would be unable to satisfy.
"This was a difficult but necessary decision," said Midway Chairman, President and CEO Matt Booty. "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 enters this process with strong underlying fundamentals, as evidenced by solid fourth quarter sales that exceeded expectations in spite of a challenging retail and general economic environment," Booty added. "Overall, Mortal Kombat vs. DC Universe sales are approaching two million units shipped, TNA iMPACT! has shipped approximately one million units, and our Game Party franchise has sold close to three million units in total."
Midway expects that Chapter 11 protection will enable the company to conduct its business operations as usual. To that end, Midway is seeking approval from the court for a variety of First Day Motions enabling the company to continue managing its operations in the ordinary course. These motions are typical of the restructuring process, and approval is regularly granted.
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