The creditors allege that the sale of the publisher generated more than $700 million in tax losses for ex-boss Redstone, enabling him to obtain a “massive” tax refund, reports Bloomberg.
“The transaction caused Midway irretrievably to lose the ability to take advantage of its valuable accumulated net operating losses and other tax assets,” the creditors committee said.
Having accused Redstone of fraudulent transfer and breach of fiduciary duty, the creditors are seeking unspecified damages.
“The conduct of Mr. Redstone and NAI was entirely proper and we strongly disagree with any suggestion that Mr. Redstone or NAI breached any fiduciary duties,” said a spokeswoman for National Amusements.