Technology

The business and culture of our digital lives,
from the L.A. Times

Mark Thomas: Midway's mystery man

Mortal Kombat vs. DC Universe

Wanted: Information on Mark Thomas, head of Acquisition Holdings Subsidiary I LLC.

His identity is like Batman's: unknown. Everyone in the gaming metropolis is buzzing about who Thomas, the man who Friday agreed to pay $100,000 for an 87% stake in Midway, the publisher of Mortal Kombat vs. DC Universe, actually is. Here are some bare-bones facts:

  • Thomas wants to be a passive investor, said Peter Kolevzon, an attorney with Kramer Levin Naftalis & Frankel, the New York law firm that is representing Thomas in the transaction.
  • Thomas is the primary investor and beneficiary of the generically named Acquisition Holdings Subsidiary.
  • He does not intend to be on Midway's board. Nor does he plan to get involved in the management of Midway despite his huge stake in the Chicago company, Kolevzon said.
  • He is a U.S. citizen, city unknown.
  • He is not granting interviews.

Bruce Wayne may be the Dark Knight, but is this Thomas character Midway's white knight?

For the last five years, the company's white knight was Sumner Redstone, a media mogul who ...

... racked up shares in the Chicago game company and bankrolled much of its projects via $70 million in loans from his company, National Amusements. But Redstone is running out of money, and creditors are breathing down his neck to pay off $1.6 billion in debt.

"Redstone is giving Midway away," said Michael Pachter, an analyst with Wedbush Morgan Securities. "That's crazy."

Midway's shares lost 5 cents, or 13%, on Monday to close at 33 cents, giving the company a market valuation of $30.4 million.

At first blush, it would appear that Thomas is getting a $30-million company for $100,000. But let's look deeper.

On the credit side of the ledger, he gets 87% of a video game publisher that owns the Mortal Kombat franchise. Midway also had $10.5 million in cash and $21.6 million in receivables as of its last quarter, ended Sept. 30. He also gets a $70-million I.O.U. that Midway once owed to National Amusements -- Midway's payments on that loan will now go to Thomas.

On the debit column, Midway has $150 million in outstanding loans, not including the $70 million it will owe Thomas. It also has a payroll of about 900 employees that it is struggling to meet. Last quarter, the company lost nearly $76 million on $51.4 million in revenue.

"The company is cash-flow negative," Pachter said. "So unless someone sinks more working capital into it, all [Thomas] can do is liquidate it and hope there's more than $100,000 left at the end of the day."

Mr. Thomas, if you're out there, we're dying to know more about you. Drop us a line.

-- Alex Pham

Image of Mortal Kombat vs. DC Universe game by Midway

 
Comments  ()

Connect

Recommended on Facebook


Advertisement

In Case You Missed It...

Videos

How to Reach Us

To pass on technology-related story tips, ideas and press releases, contact our reporters listed below.

To reach us by phone, call (213) 237-7163

Email: business@latimes.com

Andrea Chang
Armand Emamdjomeh
Jessica Guynn
Jon Healey
W.J. Hennigan
Tiffany Hsu
Deborah Netburn
Nathan Olivarez-Giles
Alex Pham
David Sarno


Categories


Archives