This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Blockbuster Won't Liquidate

Updated with additional details, background.

NEW YORK ( TheStreet) -- Blockbuster (BLOAQ.PK) and its creditors have reached an agreement on the sale of the company.

The revised deal received a favorable ruling from the bankruptcy court reviewing the company's reorganization Thursday, allowing the flailing movie retailer to avoid a Chapter 7 liquidation filing.

>>Blockbuster Timeline: From Opening to Closing Credits

"The parties have come to an accord and presented us with a more palatable situation," said U.S. Bankruptcy Judge Burton Lifland in Manhattan.

The agreement sets up an auction. A date has not yet been set.

A list of 45 creditors, including Walt Disney (DIS), Yahoo (YHOO) and Sony (SNE), had previously opposed a "stalking horse" bid of $290 million Blockbuster received in February from Cobalt Video, a limited liability company formed by funds managed by Monarch Alternative Capital, Owl Creek Asset Management, Stonehill Capital Management and Värde Partners.

Even Judge Lifland last week opposed the bid, calling it too "aggressive." "If anything is going to fly, this garbage truck better sprout wings," he said in Manhattan court.

The parties were able to agree that if the consortium were to purchase Blockbuster, it could not force the company into Chapter 7, which would essentially liquiate it.

Under the agreement, movie studios and other creditors would receive more money upfront for what they are owed and would receive a share of any offer about the $290 million bid.

Blockbuster owes major studios like Fox, Warner Brothers and Paramount about $100 million in administrative fees. They will receive about 24% of that money right away if a deal is completed by Cobalt.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.99 0.00%
FB $102.01 0.00%
GOOG $682.40 0.00%
TSLA $151.04 0.00%
YHOO $27.04 0.00%


Chart of I:DJI
DOW 15,973.84 +313.66 2.00%
S&P 500 1,864.78 +35.70 1.95%
NASDAQ 4,337.5120 +70.6750 1.66%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs