NEW YORK (
received final approval today to tap into a $125 million loan to finance operations while in bankruptcy.
The "debtor-in-possession" loan will allow Blockbuster to continue to pay employees, honor the Blockbuster Rewards program, as well as coupons, gift cards and other customer programs, maintain cash management systems and pay certain "essential" vendors, suppliers and service providers.
According to court papers, Blockbuster estimates that it owes movie studios that were secured lenders $68.5 million and $49.6 million to others.
"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," CEO Jim Keyes said in a statement. "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."
The loan was changed to meet objections from creditors and landlords. New terms require Blockbuster to have a business plan approved on Nov. 30, the same day a description of the company's reorganization terms is due.
as it suffocated under nearly $1 billion in debt.
--Written by Jeanine Poggi in New York.
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