NEW YORK ( TheStreet) -- Dish Network's ( DISH) $320 million offer for embattled Blockbuster ( BLOAQ.PK) won approval in court on Thursday.

Judge Burton Lifland approved Dish as the highest and best bid and said Blockbuster's continuing losses meant it couldn't reorganize as a stand-alone company.

Dish's winning bid came on Wednesday, following a two-day bankruptcy auction in court and closed-door discussions that extended into the wee.

>What Blockbuster's Buyout Means For Netflix

Dish will pay about $228 million in cash after accounting for certain adjustments. The deal is expected to close in the second-quarter.

""With its more than 1,700 store locations, a highly recognizable brand and multiple methods of delivery, Blockbuster will complement our existing video offerings while presenting cross-marketing and service extension opportunities for Dish Network," said Tom Cullen, executive vice president of sales, marketing and programming for Dish Network. "While Blockbuster's business faces significant challenges, we look forward to working with its employees to re-establish Blockbuster's brand as a leader in video entertainment."

Dish Network was established in March 1996 by Charles Ergen, and currently boasts more than 14.1 million customers. In March, the company agreed to purchase satellite operator DBSD North America for about $1.4 billion once it emerged from bankruptcy.

Ergen's other venture, EchoStar, has also been buying up debt in the satellite company TerreStar Networks. In February, EchoStar announced plans to buy Hughes Communications, the satellite Internet company, for $1.3 billion.

>What Will Dish Network Do With Blockbuster?

The auction for Blockbuster began on Monday with a $284 million offer from Dish, which it then raised to $307.1 million. Carl Icahn, along with a group of liquidators, made an offer of $310.6 million, before the auction was closed to the press. This offer included rolling up debt holdings into a bankruptcy loan.

SK Telecom, a South Korean wireless company, declined to up its offer from $284.5 million.

>Blockbuster Timeline: From Opening to Closing Credits

Cobalt Video, the group of creditors that issued the original "stalking horse" bid of $290 million in February, had raised its offers to $308.1 million by late Tuesday afternoon.

--Written by Jeanine Poggi in New York.

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