Midway Games Goes From Dying To Dead

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.

The open question: Who will end up with ownership of the IP rights to “Mortal Kombat,” and how much it’s worth. Earlier today we saw failing game company Eidos — and another fading video game star, Lara Croft Tomb Raider — fetch $120 million from Japanese gaming firm Square Enix.

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