nicksmith March 2, 2009 Industry 1 views Comments Print This Post  Email This Post

Is this news more fatality or fluff?

There has been a bunch of noise on the internet today about Midway selling their Mortal Kombat franchise. It was pointed out today by netDockets that Midway has filed papers in court seeking the authority to implement a key employee incentive plan. Midway recently filed bankruptcy and in an effort to turn the ship around, they look to reward 29 “officers” for meeting certain criteria in the company reorganization.

Kotaku pointed out that it is ironic that a company could find $3,755,000 for bonuses and not pay their former employees their PTO (paid personal time off) as they promised. They point out that one of the goals set forth in this incentive plan is to find a publisher for Vin Diesel’s Wheelman. They did that by coming to an agreement with Ubisoft to co-publish the upcoming game. That agreement is worth $497,500 in bonus money according to the their proposed incentive plan.

The other two milestones allude to the sale of the Mortal Kombat franchise. The company passes these milestones by successfully confirming a plan of reorganization or the sale of the Mortal Kombat intellectual property. TMRK believes that it is MIdway’s full intention to reorganize and keep Mortal Kombat as their own, not an “offloading” to pay the executives plan.

I would find it hard for Midway to stay afloat without Mortal Kombat. It is even harder to believe since the next Mortal Kombat is confirmed to be in development despite the troubling financial woes of the company. They have 120 days from their initial bankruptcy filing to sort it all out. That deadline should be on or around June 11, 2009.

The three milestones and the bonus amounts for each milestone are:

1. Milestone: Entry into a publishing/distribution agreement for
   Midway’s new “Wheelman” game (apparently already accomplished),
   performance by Midway entitling it to gross proceeds of $6 million
   under the agreement by March 1, 2009, and actual receipt of those
   proceeds. Bonus Amount: $497,500.
2. Milestone: Either (i) execution of an asset purchase agreement for
   the sale of Midway’s Mortal Kombat franchise assets or (ii) submission
   by Midway of a plan of reorganization to continue as a going concern.
   Bonus Amount: $1,292,500.
3. Milestone: The earlier to occur of (i) confirmation of a plan of
   reorganization or liquidation or (ii) closing of a sale of Midway’s
   Mortal Kombat franchise assets. Bonus Amount: $1,965,000.