When Midway majority shareholder Sumner Redstone sold off his 87% stake in the company for a paltry $100K, the move did more than send stock prices plummeting. Due to the change in control, Midway's creditors can demand immediate payment.
Midway currently faces $240 million in debt, it admitted in an SEC Filing, with $90 million owed to Redstone's theater business National Amusements. Midway has 20 days to notify investors of the control change, and creditors have 30 days to demand payment.
Should all those creditors demand their money, the beleaguered publisher, recently responsible for Mortal Kombat vs. DC and Blitz: The League II, does not believe "it would have the ability to satisfy its obligations to repay these amounts."
In other words, Midway could be bankrupt come January 20, 2009. The company has not posted an annual profit since 1999. In the past year, CEO David Zucker and chairwoman Shari Redstone have both left the troubled publisher. Before her departure, Redstone pledged more active involvement in an attempt to better the company's prospects.
To aide in these troubled times, the company has brought on analyst firm Lazard "to assist it in the evaluation of strategic and financial alternatives available."
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