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
Image: MCV
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.
Image: Wikipedia
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. repurchased
Atari from
Namco 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.