Blockbuster Faces Auction After Judge Criticizes $290M Sale Plan
The U.S. bankruptcy judge also wasn't in favor of a liquidation, which could have led to several movie studios' being unable to collect on the $100 million they are owed.
The once mighty Blockbuster movie-rental chain could be sold at auction in a matter of weeks after a judge on Thursday voiced his displeasure with a plan that might have had creditors purchasing the company for $290 million.
U.S. bankruptcy Judge Burton Lifland also didn't like the idea of Blockbuster converting its bankruptcy to a Chapter 7 liquidation, which could have led to a variety of movie studios being unable to collect the estimated $100 million they are owed.
Several of the studios owed money had opposed the $290 million sale reportedly because, under the deal terms, they wouldn't have recouped their money. Summit was in favor of the liquidation.
At a hearing Thursday, Blockbuster attorney Stephen Karotkin told Bloomberg that the studios, creditors and Blockbuster "have come to an accord."
Blockbuster didn’t return phone calls or emails, though published reports indicate the company will be auctioned in Lifland's courtroom April 4 and a hearing for approval will occur April 7.