Sumner Redstone's family holding company National Amusements Inc. is sitting on a trove of cash and near-term liquid assets of around $500 million after its latest deal to exit Midway Games Inc.

But it is still far from out of the woods: Negotiations to restructure its debt are moving slowly and a deal looks increasingly unlikely this year, say people familiar with the situation.

National Amusements is in negotiations with its banks to restructure $1.6 billion of debt after breaching the terms of its loans as the stock market cratered last month. Half that debt is due to be repaid in the middle of this month, but the discussions have a long way to go and that date could be extended, according to these people.

At the core of the discussion is a debate about which assets National Amusements will have to sell to pare its towering debt. Having invested around $800 million in Midway, Mr. Redstone sold the Midway stake at a huge loss. However, the sale sets up a considerable tax benefit.

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