Midway gets hurt, goes to court
By Jessica Citizen - Sat May 16, 2009 10:58am
The deal, which we hinted was perhaps a little shady, generated more than $700 million in tax losses for Mr. Redstone, in tern generating a "massive" tax refund for National Amusements Inc. According to an official committee of unsecured Midway creditors, this made things a little painful for Midway.
“The transaction caused Midway irretrievably to lose the ability to take advantage of its valuable accumulated net operating losses and other tax assets.”The creditors are accusing Redstone (the chairman of CBS Corp. and Viacom Inc.) of "fraudulent transfer and breach of fiduciary duty", seeking unspecified damages. The Mortal Kombat creators were forced to seek bankruptcy protection from creditors earlier this year, claiming that the recent change in ownership accelerated their buyback requirements.
Brandy Bergman, a spokeswoman for National Amusements, retaliated via email:
“This suit is completely without merit. The conduct of Mr. Redstone and NAI was entirely proper and we strongly disagree with any suggestion that Mr. Redstone or NAI breached any fiduciary duties.”The case is currently before the US Bankruptcy Court in Delaware, stay tuned for updates.
