Redstone Sued Over Midway Games Sale

Stake in Mortal Kombat company sold for peanuts for tax writeoff
By Matt Cantor,  Newser User
Posted May 14, 2009 11:26 AM CDT
Midway Games is the publisher of the Mortal Kombat series.   (Business Wire)
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(Newser) – Creditors of the video-game company behind the Mortal Kombat series are suing Sumner Redstone and board members after Redstone, Midway’s former majority owner, sold the company in a “fraudulent transfer,” the Chicago Tribune reports. Creditors say the media mogul sold his 87% stake for just $100,000 in order to allow him to claim a  $700 million tax loss while the company was driven to bankruptcy.

The five board members in the suit “put the interest of the Redstone defendants above Midway’s interests,” the creditors allege. The buyer of Redstone’s stake, investor Michael Thomas, had no video-game background and was “completely unsuited to be the 87% owner of a publicly traded company.”  A rep for Redstone’s company called the suit “completely without merit,” saying his conduct was “entirely proper.”