Unsecured lenders could get up to $7.5 million of the approximately $40 million Blockbuster owes them and also share in the money from any higher bid. Separately, Lifland said Carl Icahn and his funds are allowed to bid for Blockbuster in an auction. This comes after one junior creditor said the billionaire should not be able to participate in an auction. Blockbuster filed for a Chapter 11 bankruptcy reorganization at the end of September, at the time saying it would continue to operate stores and pay employees. It was speculated that Blockbuster would be forced to enter Chapter 7 liquidation, following the path of now defunct rival Movie Gallery. -- Written by Jeanine Poggi in New York. >To contact the writer of this article, click here: Jeanine Poggi. >To follow the writer on Twitter, go to http://twitter.com/jpoggi. >To submit a news tip, send an email to: firstname.lastname@example.org.