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Creditors fight back: MIdway gets sued
Sumner Redstone, his daughter Shari (a former Midway board member, mind you) and the mysterious Mark Thomas are all being sued, among others, by the various creditors that a nearly penniless Midway owes money to. Gamasutra obtained a copy of a 29-page lawsuit, detailing the alleged financial liberties taken by Midway's board (as well as the majority stockholders -- Sumner Redstone and now Mark Thomas), which accuses specific people of "breach of fiduciary duty, corporate waste and unjust enrichment." The suit claims Midway's current financial situation as one that "arises out of a series of disastrous and ill-advised financial transactions that largely occurred during 2008," further positing that Midway's board "either approved of the transactions or, upon learning of them, looked the other way -- taking no steps to investigate and unwind them." According to the report, Redstone's now famous infamous sale of Midway to Mark Thomas for only $100,000 was an effort to obtain a "massive tax refund," sacrificing Midway in the process. Finally, the suit states that Midway, as a company, has been "insolvent" since some time in late 2007 and its board of directors simply turned a blind eye, allowing the company to sink further into debt.Oh, and Frank from legal? Your wife wants you home. She knows you've been pretending to go to work for the last seven months.
Sumner Redstone appeals Midway sale subpoena, delays deposition
Yesterday, Sumner Redstone was due in a Manhattan court to speak in regards to the sale of Midway to Mark Thomas. That never happened, but Sumner and business partner Robert Steele's attornies did appear in a Bankruptcy court in Delaware on Friday in an attempt to get out of the scheduled deposition, Game Politics reports. As a result, Sumner will now be required to appear this upcoming Friday.Curious is the lack of his daughter, Shari, in any of the proceedings on Friday. She was due to appear in Manhattan last Thursday, March 19th, for her deposition.
Former Midway execs subpoenaed over company sale
Looks like the long arm of the law finally caught up to the Redstones, as Sumner and his daughter Shari have both been subpoenaed by the U.S. Bankruptcy Court, District of Massachusetts, regarding Sumner selling his stake in Midway to Mark Thomas. Both of the Redstones must appear in a New York court later this month for deposition and will provide physical and electronically-stored documents pertaining to the sale of Midway. For some odd reason, Mark Thomas hasn't been called. He bought Sumner's stake in the company for $100,000 and assumed $70 million in debt in doing so, which is something we would assume the court would want to hear about.Speculation suggests that Mark took over the $70 million debt because $30 million of it was secured debt, meaning that it would be paid to Thomas before the bondholders, who are owed a total of $150 million by Midway. The subpoena document states: "The cash collateral order places a clear emphasis on insiders getting paid before and, potentially, at the expense of the estates and their creditors." If you want to read the document for yourself, click here (warning: pdf link).[Via Edge]
Midway chair Shari Redstone resigns
What a ride it's been for former Midway chairwoman Shari E. Redstone, who resigned late last Friday, a week after interim president and CEO Matt Booty was installed as a permanent fixture. "With my recent appointment to the Special Committee of the National Amusements Board of Directors, I am resigning from the Midway Board to focus on these responsibilities," explained Redstone in a press release. Of course, the National Amusements appointment can be viewed as a conveniently placed raft on which Redstone quietly drifts away from the sinking wreckage. But let's choose to remember the good times: the soaring winds across a fading sunset, Leo's soft grip.Peter C. Brown replaces Redstone as Midway chairman of the board. Brown is also chairman, CEO and president of AMC Entertainment Inc.
Midway elects to keep it in the fam, new board chair a Redstone
Daddy's little girl might not know Scorpion from Sub-Zero, but she's now Midway's Chair of the Board, succeeding Kenneth Cron who recently resigned. Daddy, of course, is none other than Sumner Redstone, the majority owner of Midway Games ... oh, and Viacom and CBS. Daughter Shari Redstone had been vice chair of all three companies before her promotion at Midway, which apparently will not affect the position or size of the other chairs she sometimes occupies, including the presidential throne of gran'daddy-founded National Amusements.Ms. Redstone has actually been at odds with her father as of late, but her election as chairwoman (with Sumner's flat endorsement) does suggest that the family feud has cooled a bit. Whether this cooling effect will have an inverse reaction on Midway (you know, like, heat it up) remains to be seen – but something needs to happen.
