This morning Kotaku posted a poorly phrased story
about a court filing from Midway Games that stated that they are selling the Mortal Kombat franchise assets. If you look at the court filings from Kotaku's source of the story
, you'll find the true details behind the filing. I am not a lawyer, but deciphering the filing isn't that difficult. Basically it says three milestones that Midway Games' executives must meet in order to receive a bonus payout after the companies reorganization is completed. One of the three has already been completed, and that's the sale of publishing rights for Wheelman to Ubisoft
. The other two are related to reorganization and could result in Midway selling their Mortal Kombat assets. But in these filings the sale of Mortal Kombat is optional
and actually far less likely than Kotaku (and other MK sites) want you to think.
The second milestone is the following:
Milestone: Either (i) execution of an asset purchase agreement for the sale of Midway’s Mortal Kombat franchise assets or (ii) submission by Midway of a plan of reorganization to continue as a going concern. Bonus Amount: $1,292,500.
That milestone basically means a $1.2 million dollar bonus would be paid if Midway can either sell Mortal Kombat
rights or put together a working Plan of Reorganization
to reorganize Midway. In fact, Midway has 120 days from the initiation of the bankruptcy case
to file the Plan of Reorganization
, which puts the deadline at around June 11, 2009
. It is fully expect for Midway to file the plan and hopefully have it approved with the bankruptcy court before the June 11th date. Here is the definition of a Plan of Reorganization
from Midway's own Reorganization Glossary of Terms
The reorganization plan that sets forth the rights of all classes of creditors. It may also include various repayment schedules pertaining to the various creditors. Once the plan is filed with the Court, creditors and equity holders vote to approve it. Upon completion of this step, and with the concurrence of the Court, the plan is said to be "confirmed."
The final milestone is a variation of the second one.
Milestone: The earlier to occur of (i) confirmation of a plan of reorganization or liquidation or (ii) closing of a sale of Midway’s Mortal Kombat franchise assets. Bonus Amount: $1,965,000.
Basically the milestones say that the Midway Games executives are to earn another $1.9 million in bonuses IF
they submit a "Plan of Reorganization" WITHOUT
the sale of the Mortal Kombat franchise. This is the largest bonus for the executives, because it's the most important to Midway to retain and keep the Mortal Kombat franchise as their own
if they continue to operate after a reorganization. Thusly, the executives would be rewarded the most for retaining ownership of Mortal Kombat
during the reorganization process.
We believe that it is Midway's full intention to reorganize and retain most or all of their intellectual property. Selling off of the Mortal Kombat franchise
would only be something they'd look at if they can't possibly reorganize without doing that. To not include this possibility in their bankruptcy filings would be irresponsible, so it does not come as a surprise to us. But it does not mean that Midway is selling it at this time. To say otherwise is simply jumping to conclusions at this point. In fact, development of the Mortal Kombat 9
still continues at this point.
Keep up to date on the Reorganization of Midway Games
on their own Reorganization Page
where they have put up all the information and news for their investors about the reorganization of the company.