Blockbuster Scores Big Win In Court

NEW YORK ( TheStreet) -- Blockbuster ( BLOAQ) received a big win in court this week.

The flailing movie retailer was granted yet more time to restructure its business. Judge Burton R. Lifland of U.S. Bankruptcy Court in Manhattan said that Blockbuster has until March 21 to file its bankruptcy restructuring plan. The company will also have until May 20 to solicit votes for that plan.

Blockbuster disclosed earlier this week that it had won an extension from lenders to Feb. 4 from Jan. 14 to submit a plan.

>>Blockbuster Bankruptcy: Is It Time To Give Up?

The judge also denied a request by an ad-hoc committee of shareholders to examine Blockbuster documents. The equity holders claimed Blockbuster was undervaluing itself, saying it's actually worth more than the $1.2 billion management claims.

The same group of shareholders said earlier in the week that it is looking to entirely replace Blockbuster's board of directors. "Shareholders have serious doubts on the competence and credibility of James W. Keyes (CEO) and the board of directors," according to a court filing.

The court also denied objections by landlords who opposed Blockbuster's process for shutting down its stores. The landlords had called the motion an attempt to gain "unilateral and virtually unrestricted" power to close its stores.

Blockbuster reportedly asked creditors this week for another $200 to $250 million to be used after it exits bankruptcy protection.

Blockbuster filed for bankruptcy protection in late September as it had suffocated under nearly $1 billion in debt. Since then it has closed several hundred stores and is refocusing its attention on its digital offerings.

--Written by Jeanine Poggi in New York.

>To contact the writer of this article, click here: Jeanine Poggi.

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