The firm's European and non-US operation remains unaffected by the decision.
Midway In has filed for reorganisation under Chapter 11 with the Bankruptcy Court.
In its filing, the company cited that the November 28, 2008, change in ownership triggered accelerated repurchase obligations relating to two classes of Midway debt, which Midway anticipated it would be unable to satisfy.
This was a difficult but necessary decision,” said Midway Chairman, President and CEO Matt Booty.
We have been focused on realigning our operations and improving our execution, and this filing will relieve the immediate pressure from our creditors and provide us time for an orderly exploration of our strategic alternatives. This Chapter 11 filing is the next logical step in an ongoing process to address our capital structure.”
Midway enters this process with strong underlying fundamentals, as evidenced by solid fourth quarter sales that exceeded expectations in spite of a challenging retail and general economic environment,” Booty added.
Overall, Mortal Kombat vs. DC Universe sales are approaching two million units shipped, TNA iMPACT! has shipped approximately one million units, and our Game Party franchise has sold close to three million units in total.”
Midway expects that Chapter 11 protection will enable the company to conduct its business operations as usual.