Creditors of Midway Games Settle Suit Against Top Shareholder

Authored by Mark Hefflinger on June 8, 2009 - 8:22am.

Chicago - A group of creditors of bankrupt video game publisher Midway Games (NYSE: MWY) has settled its lawsuit against Mark E. Thomas, the investor who purchased former Midway chairman Sumner Redstone's 87% stake in the company for $100,000, Bloomberg reports.

Under the terms, Thomas will now be able to collect just $5 million ahead of other creditors, instead of the $70 million he had been seeking.

"The committee is satisfied with the settlement," Linda Dakin-Grimm, an attorney for the creditors committee, told Bloomberg.

"We believe the result is an important first step in the ongoing effort to recover damages."

The creditors are still pursuing their lawsuit against Redstone and Midway's board.

Midway, which declared bankruptcy in February, will hold an asset auction on June 29. Warner Bros. Entertainment (NYSE: TWX) has bid $33 million for most of Midway's assets, including its "Mortal Kombat" game franchise.

Related Links:
http://snipurl.com/jpo0j (Bloomberg)

http://snipurl.com/jpovc (DMW previous coverage)

http://www.midway.com