Blockbuster Inc.’s creditors on Wednesday agreed to a standstill on their opposition to a sale process for the bankrupt movie renter that a judge called “aggressive.”
Walt Disney Co., Universal Studios, Yahoo! Inc., the U.S. Trustee’s office, landlords and a committee of unsecured creditors filed objections on Tuesday calling Blockbuster Inc.’s proposed sale benefits a group of lenders at the expense of all other creditors.office, landlords and a committee of unsecured creditors.
On Wednesday, U.S. Bankruptcy Judge Burton Lifland in Manhattan court adjourned a hearing on Blockbuster’s proposal to hold an auction with a leading bid of $290 million from Cobalt Video, made up of a group of lenders including Monarch Alternative Capital LP. Forty-five creditors had objected to the deal, including Walt Disney Co., Universal Studios, Yahoo! Inc., the U.S. Trustee’s office, landlords and a committee of unsecured creditors.
Objecting creditors have said the sale proposal is aggressive because it lets senior lenders have sole right to convert the case to a Chapter 7 liquidation, repays their debt without requiring them to repay similar priority creditors, and gives them rights to lawsuit proceeds. Lifland said all creditors with the exception of Summit Distribution LLC agreed to a defer their motions to reclaim assets or liquidate the company until next week.
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