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Midway creditors settle lawsuit with investor Mark Thomas
Bloomberg reports that the creditor committee that was suing Mark Thomas over his investment in Midway have settled.
Sumner Redstone, the majority shareholder in Midway, sold his 87% stake to Mark Thomas for $100,000 in November 2008. Under the terms of the deal, Mark Thomas also took over a $30 million secured loan and a $40 million unsecured loan.
Warner Brothers have tabled a bid for $33 million for substantially all of Midway’s assets. Given that Thomas had a $30 million secured loan, he would have taken the lion’s share of this money, leaving the creditors of the bankrupt company with close to nothing.
Under the new settlement, Thomas will reduce his secured claim to $5 million and drop all other claims on Midway.
That’s a big drop from a claim of $70 million but still a pretty good return on a $100,000 investment (although I suspect that his legal fees will dwarf the money that he paid Redstone.)