Blockbuster Video Is A Box Office Bust - The UpStream

Blockbuster Video Is A Box Office Bust

posted Thursday Feb 24, 2011 by Jon Wurm

Blockbuster Video Is A Box Office Bust

The last time Blockbuster did something relevant enough to make the news they were filing for Chapter 11 bankruptcy last September and getting owned by Netflix. It seems like they finally decided to "shut it down" after 6 months of failing to rent relevance to their customers. Their courtship with bankruptcy reminds me of a movie called The Hours, it should have happened in 90 minutes or less but felt like it had taken months to finish. I'm sure it feels that way to creditors as well which is why four landlords asked a Manhattan bankruptcy judge to make Blockbuster pay rent for 38 locations or give them the authority to evict them. Summit Distribution LLC was told by Blockbuster they will not be compensated for the $6.8 million they are owed for DVDs that include but are not limited to The Twilight Saga: Eclipse, which is a double win as far as I'm concerned. Their financial fiasco can be partially contributed to no details being given about a restructuring plan that they promised after filing for bankruptcy last year. Seems to me like the #125 million they borrowed from billionaire investor Cal Icahn, in exchange for ownership, served another purpose that did not include them continuing business... and after all this they still had the nerve to charge me late fees.

To find out the thrilling conclusion to this made for TV drama about failed business ventures, hit the break.

Blockbuster has asked the U.S. Bankruptcy court for permission to hold an auction of the companies assets that would be conducted under their supervision. If their request is approved, the final sale of the company would take place before April 20th this year. Blockbuster requested an auction because,

The auction process is designed to achieve the highest and best offer for the company's assets and would be conducted under the Court's supervision.

Limited liability company, Cobalt Video Holdco, has entered a "stalking horse" bid of $290 million with regards to Blockbuster and it's subsidiaries but more offers will follow if the auction takes place. Some good news for employees is that during the selling process, corporate and franchise locations in the U.S., Denmark, Italy, Canada, Mexico, and the U.K. will continue operations as normal while customers will continue to remain mostly unaware of their existence.

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