Submitted by Yi-Wyn Yen02.11.2009
Thunderdome
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This prediction is closed and has been judged.
Judgment made on February 23, 2009: Midway Games filed for bankruptcy protection on Feb. 12, but the company continues to operate. For now. The community correctly judged this prediction. -- The Industry Standard
Original prediction: Game publisher Midway Games is in financial distress. The company, which recently announced selling more than 1 million copies of Mortal Kombat vs. DC Universe, has until Feb. 19 to repay approximately $150 million in debt to creditors. Midway has about $10 million in cash.
Midway's creditors have the right to demand immediate, full payment from the troubled gaming company because of a change-in-control clause. Media mogul Sumner Redstone sold his 87% controlling stake in Midway to private investor Mark Thomas for $100,000 in late November.
MWY hovered around 25 cents in mid-day trading on Feb. 11.
Prediction: Midway Games will be bankrupt by Feb. 19, the day it must repay its debtors.
Image: Midway Games
Price History
Prediction Statistics
| Betting Closes: | Feb 19 2009 | Current Consensus: | 2.66% | Total Bets: | 40 |
| Today's Change: | 0% | ||||
| Life Time High: | 79.41% | ||||
| Life Time Low: | 1.05% |
Comments
MWY will only bankrupt if one or more of the following is true:
1) All the creditors demand FULL REPAYMENT of debt triggered by the change of control provision
2) MWY not able to restructure debt with new creditors or yet another extension with existing creditors
3) MWY games falters affecting revenue stream
4) MWY cost cutting measures come up short
Given the reported success of the Mortal Kombat vs DC Universe and sequel effort, my opinion is the creditors may stand to lose more should it forces MWY to go into bankruptcy. I would envision that creditors will get some partial repayment with yet another extension on full repayment.
Midway just filed for Chapter 11. However, filing for bankruptcy and being bankrupt are different so continue to place those bets.
@Yi-Wyn, I had initially based my bets on potential Chap 11 filing (guess I should have asked for clarification first).
The whole point of filling for bankruptcy protection is to allow for time to restructure without the need to meet immediate debt obligations under Chapter 11 protection. Based on your clarification, there is ABSOLUTELY no way that MWY will go away by Feb 19 given the Chapter 11 does not affect non-US operations and restructuring always takes longer than 1 week with "debtor in possession".
@David, you may be right, but filing for bankruptcy protection and being bankrupt are still two different things.
Trouble is brewing. How can a person buys up Midway for a mere $100K with rights on loans above everyone else? Sounds a little too fishy.
It is impossible for Midway to receive a FINAL RULING declaring it Legally Bankrupt on, or before, Wed. Feb 19, 2009. A Final Hearing by the U.S. Bankruptcy Court for the District of Delaware on Midway's PETITION under Chapter 11 of the U.S. Bankruptcy Code cannot occur before the prediction deadline. This is not the type of PETITION that the Court is going to HEAR and RULE on within a mere 7 day window (the orginal petition being filed on Feb 12).
It was only today that the Court heard first day MOTIONS filed by Midway on Feb 12. After hearing the MOTIONS, the Court granted Midway autorization to: utilize cash, continue salary and employee benefits, pay pre-petition claims to critical vendors, and to pay for post-petition goods and services. These are simply things to allow Midway to continue its daily operations.
I can guarantee that by the predication deadline, no one is going to see:
-A Final Hearing by the Court on the Ch. 11 PETITION filed by Midway
-A Final Legal Ruling declaring Midway Bankrupt - a Final Ruling on the Petition is Mandatory for a favorable judgment to be rendered on this prediction.
Anyone betting IN FAVOR of this prediction is wasting their money.
Midway receives court approval
@ DAVID, Your Quote is a Misquote of the Article Title and needs CLARIFICATION:
Midway Receives Court Approval of Cash Collateral and Other First Day MOTIONS
Midway HAS NOT received FINAL approval on their PETITION for Ch. 11 reorganization. There is a difference between MOTIONS and the PETITION.
The article you quoted is reporting that Midway received Court AUTHORIZATION to pay their day-to-day operation and essential business expensese. What you quoted simply relates to the court granting Midway's MOTIONS to pay essential expenses.
As I explained in my comment above, there is absolutely not going to be a final disposition on Midways's original PETITION for bankruptcy before the deadline on this prediction. The Court IS NOT going to HEAR the petition and RULE on it by Feb 19.
@Edward, first of all, it isn't my quote per se and I took no credit for the article. I merely present the latest update on the Midway case.
Regardless, this prediction is destined for an unfavorable judgment due to the judgment date. As I have indicated in earlier comments, if the prediction had used filing as criteria, the prediction could have gone either way. A bankrupt definition (as clarified by Y-Wyn) makes this prediction a guarantee for an unfavorable judgment.
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