Midway files chapter 11


JackFetch
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GamePolitics has discovered that Midway has a whopping $281,033,000 in liabilities. A debt that its $167,523,000 in assets can't even begin to cover. Among those that Midway owes cash is its old CEO David Zucker, who is owed $300,000 in severance pay. There are really no winners here.

* Wells Fargo Bank - $150,000,000

* Acquisition Holdings Subsidiary - $40,000,000 unsecured loan

* National Amusements, Inc. - $20,147,864

* NBA Properties, Inc. - $17,294,849

* (License/royalty settlement) Tangible Media, Inc. - $8,675,954

* Warner Bros. Interactive - $6,654,203

* Artificial Mind & Movement - $2,000,000

* Epic Games - $1,975,000 (License/Royalties)

* Walmart - $1,576,035

* Far Sight Technologies - $1,279,151

* Best Buy - $1,114,036

* Target - $934,156

* Technicolor Video Services - $637,769

* Toys R Us - $615,276

* Ditan/Synergex Canada - $578,316

* CBS Outernet - $314,600

* David Zucker - $300,000 (severance pay)

* Multi Packaging Solutions - $287,036

* A.A.F.E.S Headquarters - $276,314

* Kmart - $218,497

* Tigon Studios - $200,000(license/royalties)

* Hollywood Entertainment - $190,982

* TNA Entertainment - $160,000 (license/royalties)

* Professional Films, Inc. - $150,000

* Synergex - Latin America - $149,027

* Pioneer.JB Marketing - $133,353

* Eclipse Advertising - $132,687

* GameStop - $127,250

* Sear, Roebuck - $125,495

http://www.1up.com/do/newsStory?cId=3172796

Forgive my business ignorance, but do companies pay stores to sell their stuff? That seems weird to me since they are making money selling their stuff already.

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It could be a heap of reasons why the stores are owed money. Remember Marvel eventually was bought out by the company it licensed to make it's action figures (ToyBiz) so anything can happen. But off the top of my head a couple of reasons for retailers being on the creditors list are:

1. Midway could just owe them trailing bonus commissions for reaching certain sales targets. Sell x copies of a certain product and receive a 5% rebate every month. If they were having cash flow problems, paying the rebate to the retailers would be at the very bottom of the list. Sometimes a rebate like that is only paid quarterly or sometimes annually. Sometimes it isn't even paid as cash, but listed on the accounts as a credit for future purchases.

2. If there were any partnerships on advertising, promotion, etc, the retailers could have paid for it and Midway owes the store their share of it. Once again, this sort of thing would be at the bottom of the payments list.

All in all though, this has the potential to be a really good thing, if a better company can get the Midway brads/products at a cheaper than market price and do something different with them.

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  • 4 months later...

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