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The Battle of Midway - Bankrupt in 30 Days?

The focus when Sumner Redstone sold off his controlling share in Midway was the financial beating the media mogul took. Now with Midway's stock price suffering, focus is returning to the company's fate, as the threat to delist its stock now looks like the least of its problems. An SEC filing noted by indicates the company is on the brink of bankruptcy, as Redstone's stock sale triggered a provision changing the way Midway's debt functions, throwing fuel on an already blazing financial fire. Following the change in control, holders of about $150 million in Midway debt can now demand 100% repayment within 30 days, and Midway admits that based on current market conditions, they believe this is exactly what the holders of their notes will do. With about $10 million in cash as of the end of October, Midway admits: "If this were to occur, the Registrant does not believe, on the basis of its current liquidity, that it would have the ability to satisfy its obligation with respect to the repurchase of the Notes." GamePolitics has commentary from industry financial analyst Michael Pachter reflecting on whether this all really means Midway will go under, and pointing out that if note holders do demand complete repayment and Midway goes belly up as a result, they end up with next to nothing, he says: "My guess is that Midway works out a deal with the creditors and remains in business, but they are going to have to start generating sustainable profits soon, or their creditors will become impatient."

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