Midway's target sales price is $30 million

The court, the debtors, the owner and the executives have agreed: $30 million is a good sales price for Midway.

That's according to the final version of the Midway's "key employee incentive plan," which was approved at an April 6 bankruptcy court hearing. In its original form, the bonus schedule was called "outrageous" by a court trustee and "disingenuous" by a committee of creditors.

The approved plan, which contains some small changes to the revised version filed two weeks ago, sets a target sales price above which the 28 "key employees" (a mix of executives, developers, and others, but not CEO Matt Booty) get a bonus.

How much? They share a $600,000 bonus pool when an asset purchase agreement is "executed" (or signed) and another $1 million bonus pool when the sale closes (actually happens). In addition, the key employees get more if they sell Midway for more. Specifically, upon the sale's closing, they get $75,000 in extra bonuses for every $1 million above $30 million (So if the final sales price is $34 million, for example, the bonus pool is $1.9 million).

As previously promised by the company, that's significantly less than the $3.755 million bonus pool in the original version.

Given Midway's state and the dismal economy, $30 million seems like a decent price. Then again, just last summer, Midway stock was trading at almost $4, giving it a market cap of around $350 million range. That's quite a fall.

The plan has been approved by everyone involved: Owner, Mark Thomas, the courts, Midway management, and its many creditors. So it's safe to assume this is a price everyone involved thinks is gettable, but just high enough they want to make sure employees are incentivized to make it happen.

While there's no direct indication of how they reached that figure, it was, according to a previous court filing by Mark Thomas, the highest bid Midway has received so far. Perhaps coincidentally, but nonetheless notably, that's also the exact amount of Thomas' secured loan -- the one that he gets paid back before any other creditors receive cash.

Also of note in the approved version of the plan:

Of course, the key employees can also get a bonus ($1.6 million, but no more) for submitting and then getting approved a plan for reorganization or liquidation that "provides for payment in full of the lender's secured claims" -- in other words, gets Mark Thomas his $30 million. That seems extremely unlikely, however (anyone out there know a way to reorganize Midway so it stays in business and gets Mark Thomas his cash?), so a sale for $30 million or more is the most likely outcome if those 28 key employees want a bonus for their months of work at a bankrupt, bereft company.