Bankrupt Blockbuster For Sale
The popular movie rental chain, Blockbuster is now bankrupt and a part of an ongoing auction that opened Monday morning. Today, a winning bid of $284 million bid from Dish Network’s Charles Ergen was placed. The next highest bidder is a hedge-fund manager, Carl Icahn at 280.9 million.
The other groups with qualified bids are Monarch Alternative Capital, South Korea’s SK Telecom, and a joint bid by liquidators Gordon Brothers Group and Hilco Merchant Resources. If Carl Icahn or the Gordon Brothers/Hilco Merchant group were to win, there would be an entire liquidation of all of Blockbuster’s stores. Blockbuster filed for Chapter 11 bankruptcy in September of 2010 with plans to reorganize, but weak holiday sales and continued losses forced them to pull out of the market, entirely.
Blockbuster intends to use proceeds from the winning bid to pay back debts owed to studios and studios have agreed to continue shipping them their latest titles, even though they may be soon out of commission. The Judge overseeing the auction is Judge Burton R. Lifland of U.S. Bankruptcy Court in Manhattan. I am curious to see what the final winning bid will be for Blockbuster and what their future plans will be for the company.