Midway Games Names Shari Redstone Chairman

Kenneth Cron leaves the board after three years.
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Video-games publisher

Midway Games

(MWY)

has elected Shari Redstone chairman. Redstone replaces Kenneth Cron, who is leaving the board after three years.

Redstone, daughter of Midway's largest shareholder, Sumner Redstone, had been vice chair.

The ascension of Shari Redstone is an important development for the struggling game maker.

The company was reporetedly the cause of a conflict between father and daughter, according to a

Los Angeles Times

article in August.

Shari Redstone was reported to have disagreed with her father's interest in Midway and the use of financial resources that could have better helped Redstone's

Viacom

(VIA) - Get Report

holding instead of Midway, the article said.

In 2005, Sumner Redstone pledged National Amusements' stock as collateral for a $425 million loan from

Citigroup

(C) - Get Report

and was reported to have used the personal debt to buy Midway shares. Citi issued a margin call later that year on the loan after shares of Midway declined.

Sumner Redstone then

transferred his personal holdings in Midway to National Amusements, which took on the debt.

The disagreement between the Redstones is reported to have heightened when Sumner Redstone bought more shares of Midway earlier this year through National Amusements.

Sumner Redstone holds an 87.5% stake in Midway individually and through Viacom parent

National Amusements

.

Shari Redstone is also a vice chair of Viacom and

CBS

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, which is also controlled by Sumner Redstone through National Amusements.

Midway's stock has plummeted nearly 59% this year and now trades near its 52-week low of $2.04. Shares of Midway closed down 3 cents, or 1.1%, to $2.80 Friday.

The video-games company badly

needs a hit and Sumner's share purchases were seen as one of the key props for the stock.

In her role, Shari plans to be closely involved in Midway's future. "In 2008, we plan to release an impressive slate of games and I will work closely with management and my fellow board members to continue pursuing exciting growth opportunities for Midway," she said in a statement.