Midway Games has announced that the company and its US subsidiaries have filed for Chapter 11 bankruptcy in the courts.
This action, which will not impact on the company's non-US operations, is intended to allow the company to continue operating in the face of overwhelming debt triggered by the sudden sale of the majority of shares by Sumner Redstone.
"This was a difficult but necessary decision," said chairman, president and CEO Matt Booty.
"We have been focused on realigning our operations and improving our execution, and this filing will relieve the immediate pressure from our creditors and provide us time for an orderly exploration of our strategic alternatives. This Chapter 11 filing is the next logical step in an ongoing process to address our capital structure."
"Midway enters this process with strong underlying fundamentals, as evidenced by solid fourth quarter sales that exceeded expectations in spite of a challenging retail and general economic environment."
Booty added: "Overall, Mortal Kombat vs. DC Universe sales are approaching two million units shipped, TNA Impact! has shipped approximately one million units, and our Game Party franchise has sold close to three million units in total."