/PRNewswire-FirstCall/ -- Blockbuster Inc. (OTHER OTC: BLOKA, BLOKB), a leading global provider of rental and retail movie and game entertainment, today announced that it has received final authorization from the U.S. Bankruptcy Court for the Southern District of
in "debtor-in-possession" (DIP) financing from certain of the Company's senior noteholders. This funding is available to help Blockbuster meet its obligations to customers, suppliers and employees in the ordinary course as it implements a plan to recapitalize its balance sheet and substantially reduce debt.
The Court had previously authorized Blockbuster access to
of the DIP financing on an interim basis. Today's final order allows Blockbuster to access the entire
The Court today also approved the retention of certain legal and restructuring advisors and granted Blockbuster authority to pay certain prepetition claims of movie studios and game providers, which will help ensure that Blockbuster's customers will continue to enjoy access to a wide variety of movies, games and television programs, including new releases the first day they become available.
September 23, 2010
, Blockbuster announced that it reached agreement with its senior noteholders on the material terms of a plan to recapitalize its balance sheet and substantially reduce debt from nearly
currently to an estimated
or less when the plan is implemented. The Company and its domestic subsidiaries filed voluntary Chapter 11 petitions to implement the recapitalization.
Blockbuster has subsequently received final court authorization, among other things, to:
- Pay employees in the usual manner and continue their benefits without disruption;
- Continue honoring the Blockbuster Rewards® program, valid coupons, gift cards and other customer programs;
- Continue to maintain cash management systems; and,
- Pay certain undisputed pre-petition obligations of certain essential vendors, suppliers and service providers.
, chairman and chief executive officer, said: "We are pleased that the court has granted these final orders, which will enable us to continue to meet our obligations to customers, suppliers and employees as we move forward with the recapitalization process. We continue to work diligently with our senior noteholders, the movie studios, the unsecured creditors committee and other key parties on our recapitalization plan, which, when implemented, will strengthen our balance sheet and allow us to continue transforming our business model."
All of Blockbuster's U.S. operations, including its stores, DVD vending kiosks, by-mail and digital businesses, are open and serving customers in the normal course. Blockbuster is fulfilling all orders as usual.