Midway Bankruptcy Update: Midway Running Short of Cash

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Patrick McCarron

TRMK Admin, Co-founder
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Yesterday <a href="http://www.gamepolitics.com/2009/04/09/court-document-midway-will-run-out-cash-june">GamePolitics.com reported that </a> Midway Games's mysterious current owner <b>Mark Thomas</b> has filed a document last week before a hearing with the <a href="http://www.deb.uscourts.gov/">US Bankruptcy Court - District of Delaware </a>. In this new document there are many mentions of Midway's current cash flow situation and how the whole sale of Midway came to be. You can read the document <a href="http://media.libsyn.com/media/gamepolitics/Midway_-_BK_-_Mark_THomas_rebut_4-7-09.pdf">here</a>.

The document states that the company will run out of money come <b>June</b> while <a href="http://kotaku.com/5206125/court-documents-show-midway-may-be-out-of-cash-real-soon">Kotaku states</a> that <b>Midway Games</b> has told them that they can exist until <b>August</b> at the current rate. Also mentioned in the article is the statement that Marc Thomas feels that Midway has overstated the value of the <b>Mortal Kombat franchise</b>. The contents of that section are <a href="http://en.wikipedia.org/wiki/Sanitization_(classified_information)">redacted</a> for it is very sensitive information at this time still because of possible other negotiations going on behind the scenes. So there isn't much to learn about there at this time.

Midway still has until <b>June 11th, 2009</b> to file their <b>Plan of Reorganization</b> with the courts. At that time we will all have a better idea of Midway's plans to hopefully escape from their current financial woes, including where and how they'll be able to finance the company's budget moving forward. Until then, we at <b>TRMK</b> wish all our friends at <b>Midway Games</b> and the <b>MK Team</b> the best in making it through this tough time.
 
That's right. They still have until my Birthday to file their Plan of Reorganisation. I wish everyone at Midway a great future.
 
"Also mentioned in the article is the statement that Marc Thomas feels that Midway has overstated the value of the Mortal Kombat franchise."

Dumb question; Can someone explain this a bit better to me?
 
Angel, the way I interpreted that sentence is as such: Mark Thomas (Mysterious owner of Midway) feels Midway overstated the value of MK as an asset in it's reports to the court. The article, which this other article is referencing, stated as such.
 
Ok let's put it this way. Midway has to make estimates based on the future earning potential of their current assets (this includes game franchises). In determining whether they have the necessary resources to pay off creditors in their bankruptcy filing they need to put a number value to that. Mark Thomas thinks the number value was too high. He thinks MK is worth something less than what Midway said it was. Or, the future earning potential of the MK franchise is less than stated.

It's hard to explain this in less-than-technical terms. But basically, how much would you pay for a hot dog stand? That would depend on how much money you think you can make on a hot dog stand. If you are only going to make 100 dollars a day would you pay 50,000 dollars for the hot dog stand? No, you'd pay something more like 5,000 or even lower.

That's what's being said here. Midway said their hot dog stand could make 1,000 dollars a day, and they say it's worth $50,000. But Mark Thomas (Mysterious owner of Midway) believes the MK hot dog stand could make only 100 dollars a day.
 
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