With Midway reportedly looking to sell off its Mortal Kombat assets, one concerned party hopes to peer underneath the tent the beleaguered publisher has pitched inside the U.S. Bankruptcy Court and settle the sticky issue of intellectual property ownership. Film producer Lawrence Kasanoff and his company, Threshold Entertainment, have filed a suit in the hopes of eliciting judgment "declaring the existence and scope of its licenses, interests and intellectual property rights in Mortal Kombat-related intellectual property." In other words: "Hey, isn't that some of my stuff in this garage sale?"

It is the suit's assertion that the Mortal Kombat franchise is "far more a creation of Threshold and Kasanoff than of Midway," with Threshold's film adaptations and TV shows allegedly signifying more creative input than that of Midway, which was "almost entirely limited to the videogames." That's right! Bet you didn't know that Mortal Kombat was a "videogame" before it became an award-winning film franchise!

Threshold backs up its claims by pointing out the "minimal back-story and mythology" provided by the games, as well as the "flat, cookie-cutter characters" it had to use as a basis for its derivative works. Indeed, anybody who's seen "Mortal Kombat: Annihilation" is sure to agree that the 78 characters in that rich, compelling film -- including the cyborg and the lizard guy -- were so much more fleshed out right until they all died or something.

[Via GamePolitics]

Source -- Complaint (warning: PDF)

On screen, Mortal Kombat's top-knotted, four-armed Goro was a menacing, scary figure, towering over our hapless Sub-Zeros and Raidens. This vintage picture from Mortal Kombat creator Ed Boon's Twitter, reveals that, in real life, Goro was just a li'l guy.

Of course, we knew the stop-motion model for the character wouldn't be fully human-sized, because that would be a ridiculous expense and effort for absolutely no payoff. But we're still delighted to see the actual sculpture used in the game, in all its diminutive glory. We also like how "homemade" the studio looks -- actual Mortal Kombat images were lit by a desk lamp taped to a cookie tin taped to some other stuff.

[Via Giant Bomb]

If the uncharacteristic lack of over-the-top gore in Mortal Kombat vs. DC Universe was an issue for you, series co-creator Ed Boon has some good news for you. Now (very clearly) heading up development of the ninth MK game, the designer has been tweeting about its content, recently saying that, "People want an M-rated MK....dammit we will give them an M-rated MK."

Boon also addressed a tweet he received asking what it would take to make an AO-rated MK, saying, "I dont know where the line is to make MK an AO rated game. But we definitely dont want to kross it." "KROSS" it? Oh Ed, you krazy klown. That never gets old!

[Via IndustryGamers]

Apparently, struggling publisher Midway has more than just Warner Bros. bidding on its remaining assets. After last week's announcement of WB's $33 million dollar offer to acquire the lion's share of Midway's properties, Midway released a statement today detailing the process and, in so many words, is allowing for larger bids. "Midway recently announced a stalking horse asset purchase agreement, which is expected to receive court approval, subject to higher or better bids, in a hearing on June 2, 2009," reads the statement. Additionally, all remaining assets owned by Midway are available for bidding as well -- including the TNA Wrestling franchise not included in the WB bid -- until the court-supervised auction takes place on June 29th.

Midway's Geoff Mogilner told Joystiq this afternoon that today's release "doesn't change that agreement [with WB]" and either side will suffer financial penalties for backing out. He also noted that the acquisition has no effect on the development teams employed by Midway as "people aren't assets." Yet, Geoff. Yet. Seriously though, he told us that any bidder wishing to acquire development teams would have to engage in a "separate acquisition" and any winning bidder on Midway's assets won't take on any of the massive debt the company is currently weighed down by. He also noted that the recipient(s) of the money from this auction have yet to be decided. Standing in line for a payout are a laundry list of creditors along with mystery man Mark Thomas.

Just a week after casting itself into uncertain waters, Midway has reportedly gotten a bite -- er, been bitten by Warner Bros. Interactive. Now comes the hard part: reeling in the deal. After losing Eidos to Square Enix, Warner's got a grumbling in its tummy for cheap chow, and for a proposed $30 million, Midway is a relatively inexpensive meal for the big fish to swallow. Still, much of Midway is simply indigestible.

An anonymous source tells MCV, "Warner is pretty confident that they will get Midway ... They look ready to put the money on the table." Whether that money is the full $30 million or just a portion of the asking price (for specific IPs like Mortal Kombat, etc.) is allegedly keeping the deal on the line. Will it snap? Oh, the suspense!

If you're looking to buy a video game company, you could do a lot worse than Midway. Think of it, for just $30 million you could own company assets like the Mortal Kombat franchise ... and ... oh! This Is Vegas! That's sure to ... have Achievement points and Trophies. Plus, you'll be helping a band of Midway employees partake in a no-larger-than $600,000 pool of bonuses, according to Midway's revised key employee incentive plan or "KEIP."

If you'll remember, the last form of this KEIP set aside $3.755 million to 29 of its employees if they managed to sell Wheelman and Mortal Kombat. Clearly, it's still a work in progress.

A US bankruptcy court document filed by Midway owner Mark Thomas (whoever that is!) reveals some dire information about the publisher that helps us understand how the mysterious Thomas was able to acquire the company for $100,000.

According to GamePolitics' summary of the document, "Midway will run out of cash in late June," having "operated at a loss for most of the last decade. In addition, the publisher "overstated the value of the Mortal Kombat franchise." CitiGroup attempted, and failed, to find a buyer for Midway, which meant that Thomas had little or no competition.

All of this information is just what hasn't been redacted in the document. We assume that the redacted portions deal with the fact that Sinistar is real and that Midway has been exhausting its cash reserves to mine Sinisite in order to make Sinibombs.

The sharks are circling! According to a rumor at Kotaku, Midway could get bought by one of three different companies. Like the belle of the ball, Midway is being closely examined by each of these potential suitors, who are evaluating the company's potential and examining IPs. These three companies are supposedly Ubisoft, Warner Bros., and a private Chicago investor, all of whom could receive a bounty of IPs upon acquisition of ... oh, who are we kidding? They just want the rights to San Francisco Rush.

The rumor also states that Warner Bros. is the most likely candidate, with a representative having already made the trek to Midway for a visit.

Like flies to honey, Midway can't seem to stop attracting controversy as it attempts to stay afloat during its "planned" bankruptcy phase. This time around, the besieged developer is coming under fire from its creditors and the government committee overseeing its bankruptcy proceedings for planning to dish out $3.755 million to 29 of its employees as part of a "key employee incentive plan."

According to The Cut Scene, the bonuses were set up to reward the select employees (five of which are supposedly Midway executives) should they manage to sell the Wheelman and Mortal Kombat franchises. The feds and creditors took issue with these goals -- when the "incentive plan" was submitted, Wheelman had already been sold to Ubisoft. The incensed parties also took issue with attaching incentives to the sale of Mortal Kombat -- a duty mandated by Midway's "obligations under the Bankruptcy Code."

There are other troublesome points in the plan, such as the fairly high amount of cash it would dispense -- cash that the owed creditors would like to see in their own coffers. Midway will reportedly file an updated (and likely less lucrative) version of the "incentive plan" before its public bankruptcy hearing tomorrow morning.

Update: The revised "key incentive plan" was submitted by Midway last night and alters the previous plan in a few key ways. Midway CEO Matt Booty has been subtracted from the equation, leaving four out of 28 potential employees receiving bonuses, and of those 28, the bonus will be based on the amount of money various properties are sold at. The sale of the Wheelman property will no longer be considered as part of the bonus requirements and the Mortal Kombat franchise will only count if "all of its assets" are sold along with it. To read more about what has changed, check out The Cut Scene.

While Midway has offered up the sale of Mortal Kombat in its continued fight for survival, the troubled publisher's confidence in the franchise isn't quite as shaken as may be believed. Company spokesperson Geoff Mogilner recently told MTV Multiplayer that while shedding the visceral brawler "could happen," selling off Mortal Kombat is "not something that we as a company are going for."

Even so, Mogilner admitted that there is "definitely interest" from other publishers regarding Mortal Kombat, and that "conversations" are happening, though he wouldn't talk specifics. Still, the corporate spokesperson did estimate that the Mortal Kombat franchise as a whole is responsible for an impressive $1.5 billion, which given Midway's current financial upheaval would certainly come in handy right about now.

[From the Joystiq accounting department: In an effort to conserve funds in these tough times, we've cobbled together this story about Midway losing money from fragments of other stories about Midway losing money, with a minimum of editing and the small bit of news bolded. Thank you for your patience during these trying times.]

As pillars continue to topple all around Midway, the company has begun to search for new ways to [1] plan for survival in its continuing struggle to keep its head above water [2]. But for every small chance at redemption Midway Games finds, there seems to be another piece of bad news hiding around the corner. The latest nugget of news is that [3] budgets estimate that between February 9 and May 4, Midway will spend $12,392,598, an approximately 75% depletion of its reserves.

Midway owner ... relatively unknown Mark Thomas [4] says "Midway is hemorrhaging cash at an alarming rate," though we're sure the words he was really looking for were complicated and terrifying [5]. When things are going south as quickly as they have gone for Midway, you take your victories where you can [6], they have already shipped 1.8 million copies of Mortal Kombat vs. DC Universe! [7]

As pillars continue to topple all around Midway, the company has begun to search for new ways to stay relevant, reaching out to one of the last remaining assets left in the struggling publisher's corner. Despite reportedly offering up company darling Mortal Kombat for sale, The Cut Scene reports that Midway hopes to keep series co-creator Ed Boon around -- at least for a while longer -- by continuing to pay bonuses for his role in Mortal Kombat vs. DC Universe and an unannounced series entry in 2009's fourth quarter.

Midway has apparently asked bankruptcy court for approval to pay the designer some $900,000 for sales of last year's comic book crossover. Another $105,000 is promised for other MK franchise revenue to Boon, whom Midway describes as "critical to maximizing the value of one of the Debtors' primary assets." The report suggests that keeping Boon around makes Mortal Kombat more attractive to potential suitors, assuming that he tags along if a company happens to open up its wallet.

Still, critical or not, paying out bonuses seems like a tall order to fill for an outfit that's up to its eyeballs in debt.

Midway is reportedly looking to sell off its Mortal Kombat franchise in its continuing struggle to keep its head above water. To put this into perspective, this would be like a family of many children putting the only child who managed to go to college up for adoption on Craigslist. And sure, maybe he only went to community college and dropped out after two years but he nonetheless represents a source of family pride.

According to documents allegedly gathered by netDockets, the company's plan for survival includes the "execution of an asset purchase agreement for the sale of Midway's Mortal Kombat franchise assets." What effect this has on that other Mortal Kombat game already in production is anyone's guess. Other goals include ridding the company of its Diesel-fueled Wheelman property, which was rolled in Ubisoft's garage in mid-February.

The publisher has reportedly set aside $3,755,000 to be split among among 29 of the publisher's "officers, management-level employees and other non-insider key employees" if these milestones are met. That's a hefty sum, though we question how thrilled Midway's creditors (not to mention former employees) will be as execs continue to gut the embattled publisher in the name of filling their own gold-lined pockets.

Update: Geoff Mogilner, Midway head of investor relations, tells Edge, "We're not going out of our way to sell Mortal Kombat." That's not say, Midway wouldn't sell Mortal Kombat ...

After throwing up the white flag last week, the U.S. Bankruptcy Court has granted Midway some some breathing room from creditors who are all but beating down the door for a piece of the embattled publisher. The ruling allows Midway to keep its doors open despite its ongoing financial crisis in order to continue paying employee expenses and pay back what the court describes as certain "critical vendors."

Midway boss Matt Booty describes the court's decision as a key step in the company's "planned and orderly reorganization," though we're sure the words he was really looking for were complicated and terrifying. It's probably difficult to come up with the right thing to say after someone plunges an arm into your chest to remove your still-beating heart.

Midway has filed for Chapter 11 bankruptcy today, but, see, it's okay, because it's all part of the plan. Newly appointed CEO, Matt Booty, says filing for Chapter 11 was "a difficult but necessary decision." He also noted Midway has been "focused on realigning our operations and improving our execution" and that filing for Chapter 11 will allow the company some relief from "immediate pressure from our creditors." To Booty, Chapter 11 is nothing more than the "next logical step in an ongoing process to address our capital structure."

Midway expects to be able to run the company as usual, and even filed a variety of First Day Motions to that end. The court is usually lenient with these Motions and often grants them, so this should give Midway some time to finish up that next Mortal Kombat game and maybe get out of the red.