Midway Games files for bankruptcy protection

CHICAGO -- Midway Games, best known for its Mortal Kombat video games, said Thursday that it filed for bankruptcy protection.

Midway said the filing stemmed from a change in ownership in late 2008 that led to accelerated buyback requirements related to two classes of debt that the company did not think it could fulfill.

In December, media mogul Sumner Redstone sold his majority stake in Midway — an interest of about 87.2% — to a company led by private investor Mark Thomas.

In a statement, Midway Chief Executive and President Matt Booty called the bankruptcy filing a "difficult but necessary decision."

"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," he said.

Midway said that it and its U.S. subsidiaries filed voluntary petitions in U.S. Bankruptcy Court for the District of Delaware.

Midway said the filing does not include its operations outside the U.S., and that they will continue to operate as normal.

The company is seeking several first-day motions so it can continue to operate normally.

Midway shares fell 10 cents, or 40%, to 15 cents in morning trading.