As reported earlier, Midway recently filed for Chapter 11 bankruptcy protection. Things at Midway have been known to be dire for a while, with signs including mass layoffs and Ubisoft helping publish The Wheelman. Now, Kotaku is reporting on a post made by netDockets that Midway has filed a request to the court seeking permission to implement an incentive plan for upper management employees. This incentive plan, which would be worth $3.7 million USD total, would be paid out in the event certain milestones are met. The Wheelman publishing agreement is one of the milestones. The other two milestones listed are conditional: either submit a plan for reorganization (or a plan for liquidation), or sell off the franchise assets for Mortal Kombat. From the netDockets article:
The motion describes the group of 29 eligible employees as "officers, management-level employees and other non-insider key employees." The proposed plan ties bonus payments to three designated milestones. If all milestones are met, the total bonus pool available for distribution would be $3,755,000. For each milestone payment, each employee eligible to participate in the plan would receive a set percentage of the bonus amount designated for that milestone.
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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.
In addition, Kotaku is reporting that one of the ways Midway is seeking to raise the money for the employee incentive is to deny paid time off for laid off employees, which they had originally promised to pay. The report includes letters from Midway both announcing the payment of PTO, and a plan to deny said PTO.
It should be noted that while Midway's filing is not an absolute announcement that Mortal Kombat will be sold off, the company currently has so much debt and so little incoming capital that the chances of Midway reorganizing itself into a manner that will get it out of bankruptcy are looking increasingly dim. We'll continue to keep an eye on this story. As we learn more, we'll report it here.
To read the original netDockets report that mentioned the possible sale of MK, click here. To read Kotaku's report on the plan to deny PTO, click here.
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