Company’s Bankrupt, But Midway Execs Get Greedy (Updated, Now with Less Greed)

Bailed-out insurer A.I.G. isn’t the only in-the-toilet company doling out questionable bonuses to the very execs who ran it into the ground.

For example, there’s Midway.

Ben Fritz, who pens Variety’s The Cut Scene blog, reports that the financially-troubled game publisher tried to persuade the U.S. Bankruptcy Court to permit it to:

  • pay "incentive" bonuses for an event which already happened (the sale of Wheelman to Ubisoft)
  • pay $1.3M in bonuses for either selling the Mortal Kombat franchise or developing a plan to reorganize the company
  • pay $2M in bonuses for closing the Mortal Kombat deal or getting the reorganization plan approved by the Court

However, the government’s Bankruptcy Trustee objected, noting that:

  • it’s hard to pay an incentive for something that happened in the past. The Trustee called this "disingenuous"
  • what else do Midway execs have to do except either sell MK or reorganize the company? That’s kind of their job at this point
  • the size of the proposed bonuses are "outrageous," in the words of the trustee:

The Debtors seek authority to pay bonuses to a selected group of officers and managers which are four hundred percent greater than bonuses paid to the same group in 2008 when the Debtors were not before the Bankruptcy Court.

 

Given the current state of the general economy, coupled with historical data related to incentive bonuses paid by these Debtors, the Motion constitutes an outrageous request and is not justified by the facts and circumstances of the case.

DOCUMENT DUMP: Grab a copy of the Trustee’s objection here.

UPDATE: The Cut Scene has posted an update indicating that Midway has yielded to the Trustee’s objections. Its new bonus plan:

  • eliminates the Wheelman bonus
  • the Mortal Kombat bonus now only applies if Midway sells all of its assets
  • A bonus still kicks in a reorg plan is approved by the Court
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