Midway Liquidation OK’d by Bankruptcy Judge

US Bankruptcy Judge, Kevin Gross has recently approved Midway Games’ liquidation plan. The former game publisher organized a plan which will reimburse creditors from their sale back in 2009, to Time Warner.

Midway Games filed for bankruptcy in February of ’09 after suffering years of losses. Last July, Time Warner made a move to purchase Midway’s studios, located in Chicago and Seattle, in addition to assets which include Mortal Kombat, for a reported $33 million. The now defunct video game company had been worth millions during the heyday of coin-operated video gaming. Unable to keep up with today’s gaming module systems’ game makers, Midway began to buckle and fall into debt.

Last May, Midway’s creditors sued its majority stakeholder, Sumner Redstone as well as former Midway chair, Shari Redstone (the former’s daughter) and board members over Midway’s sale to investor, Mark Thomas. While creditors later settled with Thomas, they continued their action against the Redstones and Midway board members. This was all later dismissed entirely by Judge Gross, earlier this year.

An attorney for the Redstones said recently their company, National Amusements, have agreed to pay an estimated $1 million to the liquidating trust, in exchange for dropping the lawsuit.

Judge Kevin Gross, according to Bloomberg News, was “satisfied fully” with Midway’s liquidation plan. The Bloomberg report mentioned roughly $34.7 million available to creditors. Unsecured noteholders, owed nearly $155 million, will be reimbursed $25.5 million according to the plan—a 16.5% recovery. Meanwhile, the plan calls for unsecured creditors, owed roughly $36.7 million, to be reimbursed approximately $9.2 million—a 25% recovery.