Midway has 50 days to come up with $150 million

Sumner Redstone's sale of the struggling videogame publisher may have been good news for him (as good as new can be after you've lost $500 million-plus in equity) but it has made things even tougher for company management.

As diclosed in an SEC filing today (I had help understanding what it means), the change in control triggered a provision allowing holders of the "Mortal Kombat" publisher's debt notes to request payment of the principle. Given Midway's dire financial state, they're expected to so.

With only $10.3 million on hand as of Oct. 31, Midway won't be able to come up with that kind of money that fast, no matter how well "Mortal Kombat vs DC" sells (and it seems like it is selling pretty well). So the board of directors has engaged financial advisory firm Lazard to help it explore "strategic and financial alternatives" to its liquidity problems. If it can't find a new source of funding or re-negotiate its debt, looks like it will probably have to declare bankruptcy.

Mysterious private investor Mark Thomas, who bought Redstone's 87% stake, won't be any help. He will remain completely passive and won't take a seat on the board or get involvedin management.

Looks like we can expect some seroius changes at Midway by the end of January.

(I've also confirmed that beyond its $150 million in debt notes, Midway also has a $90 million credit facility with Redstone's holding company National Amusements that's still in place, along with a $40 million "factoring agreement" <basically more credit>. As part of the his convoluted purchase deal, Thomas is now participating in $70 million of that $90 million. Though it's largely irrelevant because even if Midway finds a solution to the $150 million of note, it doesn't look likely to pay back NAI or Thomas anytime soon.)