Midway creditors agree $1 million pay-off

Lump sum will settle outstanding claims against Sumner Redstone

By Phil Elliott.Published Friday 28th May 2010, 8:41am GMT

The remaining creditors of Midway Games have agreed to accept a $1 million lump sum to settle the last of the outstanding claims against former owner Sumner Redstone, reports Bloomberg.

The cash represents a better deal than was previously on the table, which would have seen unsecured creditors of the parent company scoop 16.5 per cent of funds owed, while unsecured creditors of subsidiaries would have been in line for 25 per cent.

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Midway's end, now near following confirmation of its Chapter 11 last week, follows a torrid two year period which saw the company collapse under a debt mountain, before being purchased for 100,000 by investor Mark Thomas.

He subsequently walked away with $5 million as the former Mortal Kombat publisher spiralled into oblivion, with some of its assets sold to Warner Bros while the European subsidiary was the subject of a management buy-out.

The bankruptcy court will rule on this settlement on June 23.

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