Five former high-profile executives from Midway have been found innocent of conspiracy to deceive the public about the health of the fallen company.
District Court judge David H. Coar has in the past months been hearing various allegations from out-of-pocket shareholders, who claimed that certain Midway execs knowingly kept them in the dark about the firm’s tumultuous financial condition.
But the judge ruled that the Midway execs did little more “than publicly adopt a hopeful posture that its strategic plans would pay off.”
Judge Coar said: “such preening for the financial press is classic puffery.”
Midway Games filed for Chapter 11 bankruptcy protection back in February, listing a debt of $281 million. It was subsequently bought by Warner for at least $33 million.
The five acquitted executives are former CEO David Zucker, CFO Thomas Powell, marketing boss Steven Allison, company controller James Boyle, and senior VP of publishing Miguel Iribarren.
Judge Coar commented that Midway stock began to jump after Viacom CEO Sumner Redstone made an interest in the company, while his selling of its stock saw the firm’s share price plummet.
It was ruled in court that the claimant shareholders had not “adequately alleged the direct liability” of the Midway execs.