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Court approves Midway liquidation

By David Jenkins

Mon 24 May 2010 7:44am GMT / 3:44am EDT / 12:44am PDT

Creditors circle corpse of veteran publisher as last rites approved by US judge

Liquidation plans for publisher Midway Games have been approved by a US bankruptcy judge, as the company attempts to pay creditors from the sale of assets to Time Warner.

Warner Bros Entertainment won court approval to acquire Midway's US assets in July 2009, after making a $33 million offer for the Mortal Kombat franchise and Midway's studios in Chicago and Seattle. Midway Newcastle and San Diego were not included in the deal.

Midway realised around $49 million from the Warner Bros deal, with investor Mark Thomas personally making $5 million from the buyout following the controversial acquisition of Sumner Redstone's 87 per cent majority stake in the publisher.

Unsecured creditors, who accused Thomas, Redstone and a number of Midway executives of "purposeful deception", lost a court case in January over the affair. However, claimants were paid around $1 million to drop a related lawsuit.

According to a Businessweek report around $34.7 million will now be made available to creditors. Unsecured noteholders, who are owed approximately $155 million, will get just $25.5 million - around 16.5 per cent of the owed amount.

Unsecured creditors will do better, recovering around 25 per cent of the $36.7 million owed to them by Midway.

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