Sumner Redstone, Midway Games Board Sued by Creditors

Authored by Mark Hefflinger on May 14, 2009 - 10:32am.

Chicago - Creditors of bankrupt game publisher Midway Games (NYSE: MWY) have filed a complaint against the company's former majority shareholder, Sumner Redstone, as well as its current owner and board, over the sale of control of the company to a person the creditors claim is "wholly unsuitable." Redstone sold his 87% stake in Midway to Massachusetts resident Mark Thomas for just $100,000 in November; Thomas also assumed $70 million in Midway debt owed to Redstone's National Amusements.

The creditors claim that Redstone benefitted from a "massive tax refund" as a result of the deal, and that, "as a result of this irresponsible behavior, Midway and its creditors were denied the ability to secure a bona fide strategic partner in restructuring the company's business."

They also say that Thomas, who as a result of the deal will be placed before them in line to be repaid by Midway, has "no background in the video game industry."

National Amusements called the claims "completely without merit."

"The conduct of Mr. Redstone and [National Amusements] was entirely proper," the company said in a statement.

Related Links:
http://snipurl.com/i17y4 (Chicago Tribune)

http://snipurl.com/i17sa (Los Angeles Times)

http://www.midway.com