“We finished negotiating at the courthouse,” and now U.S. Bankruptcy Judge Burton Lifland is allowing the sale process to go forward, said Martin Sosland, a partner in the Dallas office of Weil Gotshal & Manges LLP.
Now seven parties — including stalking horse bidder Monarch Alternative Capital LP — are conducting due diligence, he said. Billionaire Carl Icahn is expected to make an offer. He didn’t join in with other senior lenders who made a $290 million bid last month to get the process started.
The process should move fast now. Depending on the court’s calendar, parties have tentatively set a March 31 deadline for bids, an auction April 4 and a hearing April 7, Sosland said.
Even though Blockbuster has been shrinking as consumers adopt video on demand and competitors Netflix and Redbox gain market share, studios aren’t sure how to replace its significant DVD revenue. Blockbuster sales were about $3 billion last year.
Sony Pictures Home Entertainment Inc. said in a filing late Wednesday that while the “sale described in the bid procedures would be far from an optimum outcome for anyone, it is significantly superior to the Chapter 7 liquidation alternative. First and foremost, it preserves the possibility of a going concern, which provides all the benefits a Chapter 7 liquidation destroys.”
Lifland, who had expressed concerns about Blockbuster’s solvency and terms of the sale proposal, said Thursday that “the parties have come to an accord and presented us with a more palatable situation.”
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