Midway Games, unable to pay its $150 million USD debt to bond owners, filed for bankruptcy early this morning.
"This was a difficult but necessary decision," said Midway President and CEO Matt Booty. "…this filing will relieve the immediate pressure from our creditors and provide us time for an orderly exploration of our strategic alternatives."
The Chapter 11 bankruptcy filing — which is a fancy label for "we have no money but want to keep working" — encompasses all U.S. Midway operations. Oversea studios remain unaffected at this time.
"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 commented. "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."
"We have been focused on realigning our operations and improving our execution… This Chapter 11 filing is the next logical step in an ongoing process to address our capital structure."