As GamePolitics reported last month, Mortal Kombat publisher Midway was sold at the fire sale price of $100,000 to mystery investor Mark Thomas, who also assumed $150 million worth of Midway debt.
The troubled company’s creditors held the right to demand repayment later this month, a move which could have driven the final nail into Midway’s corporate coffin. But Edge is reporting that Midway’s creditors have agreed to extend the deadline to February 19th.
It’s worth noting that Midway is scheduled to release Wheelman on February 16th. Could sales and Metacritic scores of the Vin Diesel game help note-holders make up their minds about Midway’s fate?
As Wedbush-Morgan analyst Michael Pachter told us last month, it is in the creditors’ best interests if Midway survives:
Creditors cannot expect Midway to repay unless the company remains in business. If the creditors compel bankruptcy liquidation, they’ll get something, but arguably less than the full $150 million. Midway’s assets are worth something, but in this market, it is hard to figure out how much. As a comparison, THQ has an enterprise value of only $80 million, so Midway’s assets in liquidation would have to be worth twice as much as THQ’s (as a going concern) for the creditors to be repaid.
My guess is that Midway works out a deal with the creditors and remains in business, but they are going to have to start generating sustainable profits soon, or their creditors will become impatient.