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It's starting to look like the bankruptcy of Midway Games (MWY) will be a windfall for its titular owner, the mysterious Mark Thomas.

A quick review of what drove Midway under (or at least with such rapid speed): In December Sumner Redstone sold his 87% stake in Midway to Thomas, a man with no prior experience in the gaming business. The price: a paltry $100,000, plus a boatload of debt.

Classic game titles like Rampage, Defender, Tron, Spy Hunter, Gauntlet, Joust and even reviving Mortal Combat to battle the DC Comic book characters couldn't save Midway Games (NYSE:MWY) from Bankruptcy.

 

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Filed under: Bad news

No big surprise here: After Sumner Redstone dumped his 87% stake in Midway Games (MWY), best known for the "Mortal Kombat" franchise, the move triggered bond covenants allowing Midway's creditors to demand immediate repayment of tens of millions of dollars of debt.

The debt triggered widespread speculation Midway could go bust by the payment's due date, Feb 19. Turns out Midway died a week early: The company today filed for bankruptcy.

Midway Games (MWY) announced that it has filed for protection from creditors under Chapter 11 of the U.S. bankruptcy code. The filing does not include the company’s non-U.S. operations.

The company said that the November 28 change in control of the company, in which Sumner Redstone sold his stake in the company “triggered accelerated repurchase obligations relating to two classes of Midway debt, which Midway anticipated it would be unable to satisfy.”