Midway Games Inc. (NYSE:MWY) today announced that the company and its
U.S. subsidiaries filed voluntary petitions in U.S. Bankruptcy Court for
the District of Delaware for reorganization under Chapter 11 of the U.S.
Bankruptcy Code. The filing does not include the company’s non-U.S.
operations, which will continue business as normal.
In its filing with the Bankruptcy Court, the company cited that the
November 28, 2008, change in ownership triggered accelerated repurchase
obligations relating to two classes of Midway debt, which Midway
anticipated it would be unable to satisfy.
“This was a difficult but necessary decision,” said Midway Chairman,
President and CEO Matt Booty. “We have been focused on realigning our
operations and improving our execution, and this filing will relieve the
immediate pressure from our creditors and provide us time for an orderly
exploration of our strategic alternatives. This Chapter 11 filing is the
next logical step in an ongoing process to address our capital
structure.”
“Midway enters this process with strong underlying fundamentals, as
evidenced by solid fourth quarter sales that exceeded expectations in
spite of a challenging retail and general economic environment,” Booty
added. “Overall, Mortal Kombat vs. DC Universe sales are
approaching two million units shipped, TNA iMPACT! has shipped
approximately one million units, and our Game Party franchise has
sold close to three million units in total.”
Midway expects that Chapter 11 protection will enable the company to
conduct its business operations as usual. To that end, Midway is seeking
approval from the court for a variety of First Day Motions enabling the
company to continue managing its operations in the ordinary course.
These motions are typical of the restructuring process, and approval is
regularly granted.
About Midway
Midway Games Inc. (NYSE:MWY), headquartered in Chicago, Illinois, with
offices throughout the world, is a leading developer and publisher of
interactive entertainment software for major videogame systems and
personal computers. More information about Midway and its products can
be found at www.midway.com.
FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995
concerning future business conditions and the outlook for Midway Games
Inc. (the "Company") based on currently available information that
involves risks and uncertainties. These forward-looking statements
include, without limitation, statements regarding the Company’s
expectations concerning the bankruptcy process, the continuation of
day-to-day operations and payments to vendors and employees in the
ordinary course. The Company's actual results could differ materially
from those anticipated in the forward-looking statements as a result of
these risks and uncertainties, including, without limitation, (1) the
impact of today’s announcement on the Company’s operations; (2) the
ability of the Company to continue as a going concern; (3) the ability
of the Company to obtain approval of and operate pursuant to the
agreement with its secured creditor for the use of its cash collateral;
(4) the ability of the Company to obtain court approval of the Company’s
first day papers and other motions in the Chapter 11 proceeding pursued
by it from time to time; (5) the ability of the Company to develop,
pursue, confirm and consummate one or more plans of reorganization with
respect to the Chapter 11 cases; (6) risks associated with third parties
seeking and obtaining court approval to terminate or shorten the
exclusivity period for the Company to propose and confirm one or more
plans of reorganization, or the appointment of a Chapter 11 trustee or
to convert the cases to Chapter 7 cases; (7) the ability of the Company
to obtain and maintain normal terms with vendors and service providers;
(8) the ability of the Company to maintain contracts that are critical
to its operations; (9) potential adverse developments with respect to
the Company’s liquidity or results of operations; (10) the ability of
the Company to fund and execute its business plan; (11) the ability of
the Company to retain and compensate key executives and other key
employees; (12) the ability of the Company to attract and retain
customers; and (13) any further deterioration in the macroeconomic
environment or consumer confidence. Discussion of additional factors
that could cause actual results to differ materially from management’s
projections, forecasts, estimates and expectations is set forth under
"Item 1. Business - Risk Factors" in the Company’s Annual Report on Form
10-K for the year ended December 31, 2007, and in more recent filings
made by the Company with the Securities and Exchange Commission. Each
forward-looking statement, including, without limitation, financial
guidance, speaks only as of the date on which it is made, and Midway
undertakes no obligation to update any forward-looking statement to
reflect events or circumstances after the date on which it is made or to
reflect the occurrence of anticipated or unanticipated events or
circumstances, except as required by law.
