This week has been filled with good news for Midway Games in their continuing bankruptcy proceedings
. According to the Wall Street journal
, Midway filed court documents earlier this week stating that they came to agreement with their unsecured creditors over employee bonus plans. The unsecured creditors were upset with the terms and amounts of the previous bonuses. Because the agreement, Bankrupcy judge Kevin Judge approved Midway's updated employee bonus plan. The old bonus plan was the one that sparked a lot of premature rumors about Midway selling off Mortal Kombat
Under the approved plan, Midway is allowed to distribute two rounds of bonuses if certain goals are met. The first $600,000 may be distributed if the company enters an asset-purchase agreement with a stalking-horse bidder for at least $30 million. Filing a plan of reorganization would also trigger the payment.
The second milestone - which could provide employees with upwards of $1 million in total - requires the company to gain approval of a plan of reorganization or liquidation that fully repays Midway's lenders. The closing of a sale would also entitle the employees to extra cash. If the sale proceeds are $30 million, the employees will share a $1 million pool. For every additional $1 million the sale yields, the employees will share $75,000 more
Further good news came from a few reports
of a potential bid
to be made by one of the aforementioned unsecured creditors, Warner Brothers
, to purchase Midway Games
. Previously the court along with WB and the other creditors had reached a target sales price for Midway to be $30 million
. Warner Brothers is said to be particularly interested in some key franchises that Midway Games has like Stranglehold
and of course Mortal Kombat
. Warner Brothers also has many ties to the Mortal Kombat franchise, so it could give them many reasons to want to own the franchise.
Of course Warner Brothers is the owners of DC Comics
and assisted in the development of the latest MK game Mortal Kombat vs DC Universe
. Warners also owns the distribution rights for the two previous Mortal Kombat movies
. In the late 1990s the company behind distribution of the Mortal Kombat movies, New Line Cinema
, was purchased by Warner Bros. So this may give them even more interest in Midway Games, especially with them hopefully thinking
of bringing the movies to the Blu-ray HD format sometime soon. This doesn't give new hope for a new movie just yet, as the license rights are owned separately by Threshold Entertainment
Also Warner Bros. is no stranger to the video game business either. In the late 70s they purchased Atari Inc
from founder Nolan Bushnell
. After the video game crash of 1983
nearly shut it down, it was sold to Pac Man developer Namco
in 1985. Then, not even 10 years later in 1994 Warner Bros.
and renamed it Time-Warner Interactive.
During this period, Time-Warner Interactive
produced arcade games like Primal Rage
, Area 51
and San Francisco Rush
under the Atari Games
brand. Then in 1996, Time-Warner Interactive
was sold to Midway Games in 1996
. Midway Games later renamed it Midway Games West
, and it existed until 2003 when closed that division. So if this were to go through, Warners would be basically re-purchasing part of the old Atari Games they've owned two other times in the past, along with all the intellectual property that Midway Games has created as well over the years.
Stay tuned for further developments, as it looks like the next few months could be very interesting.