Midway files for Chapter 11 protection

Midway has announced that it will seek Chapter 11 protection from its creditors, although this does not affect operations outside the US.

Chapter 11 does not mean that the company has gone bust: it allows the company protection from its creditors while it re-organizes and tries to trade its way out of difficulties.

Midway has outstanding bonds worth $150 million which became due when Sumner Redstone sold his controlling stake in December 2008 due to a change of control clause. The company was able to negotiate an extension to the repayment until February 19, but it seems that the company concluded that it would be unable to refinance the bonds in time.

Midway  laid off 180 staff in December 2008 and 90 staff in August 2008 as part of its restructuring efforts.