Posted on Thursday, April 21st, 2011 by Angie Han
Earlier this month, Dish Network purchased Blockbuster, Inc. to the tune of $320 million (or “$228 million in cash after adjustments for available cash and inventory”) at a bankruptcy court auction for the once-great video rental chain. Blockbuster, Inc. filed for Chapter 11 last fall with nearly $1 billion in debt, much of it to major movie studios.
At the time, we wondered what the satellite television provider’s plans for Blockbuster were. Now, recent documents have made that picture a little bit clearer. Read on after the jump.
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Briefly: Once the reigning champ of home video retailers, Blockbuster Inc. went into bankruptcy not long ago. Now, as creditors have not been able to agree upon a plan to reorganize the company’s assets, the chain is up for auction. Four creditors (Monarch Alternative Capital, Owl Creek Asset Management, Stonehill Capital Management and Varde Partners) have created Cobalt Video Holdco, LLC in order to begin the sale with a ‘stalking horse’ bid: a $290m offer, which is intended to establish a lower threshold for bids. That collection of creditors could end up owning Blockbuster if no one else bids. Read More »