Midway Games wins approval of procedures for $33 million asset sale

By Caroline Salls

Pittsburgh, June 3 - Midway Games, Inc. obtained court approval of the bid procedures for the proposed $33 million sale of substantially all of its assets to Warner Bros. Entertainment, Inc., according to a Wednesday filing with the U.S. Bankruptcy Court for the District of Delaware.

If Warner Bros. is not the high bidder at auction, Midway will pay it a $1 million break-up fee and reimburse up to $100,000 of its sale-related expenses.

Either Midway or Warner Bros. can terminate the stalking horse agreement if the sale has not closed by July 15, unless the closing is delayed because the court has not yet approved the sale, in which case the agreement cannot be terminated until July 31.

Competing bids are due by 4 p.m. ET on June 24 and must be for an amount at least equal to the stalking horse bid, plus the break-up fee and expense reimbursement, plus a $300,000 overbid amount.

All bids must include a $5 million cash deposit toward the purchase price.

If one or more qualified competing bids are received, an auction will be held on June 29. Bids at auction must be for at least $150,000 more than the previous bid.

The sale hearing is scheduled for July 1.

Midway Games, based in Chicago, is a developer and publisher of interactive entertainment software for videogame systems and personal computers. The company filed for bankruptcy on Feb. 12, and its Chapter 11 case number is 09-10465.

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