Ex-Midway bigwigs subpoenaed

Ex-Midway Games majority shareholder Sumner Redstone and his daughter, former Midway chair Shari Redstone, have been subpoenaed by the U.S. Bankruptcy Court, District of Massachusetts amidst questions regarding the sale of the Chicago-based games publisher to investor Mark Thomas.

The two key Midway figures are commanded to appear in New York City later this month for depositions, and are required to bring with them a wide variety of physical and electronically-stored documents pertaining to the sale of the company last year, when Sumner sold his 87 percent stake in Midway.

Little is known of Thomas, who has yet to be subpoenaed. He purchased the company for $100K and assumed $70 million of the company's debt. Midway subsequently filed for bankruptcy in February.

But later that month, Midway shareholders filed an objection in bankruptcy court, saying the bankruptcy is "tainted by highly unusual transactions by insiders ... that, to put it charitably, require significant scrutiny."

One main point of contention is that of the $70 million of debt that Thomas assumed from his acquisition of Midway, $30 million is secured debt that would be paid to Thomas before the bondholders, who are owed a total of $150 million by Midway. "The cash collateral order places a clear emphasis on insiders getting paid before and, potentially, at the expense of the estates and their creditors," the filing claimed.

Thanks to GamePolitics

Article supplied by Edge-Online