Blockbuster to be sold; opening bid set at $290 million

Home video chain Blockbuster Inc., in bankruptcy, has opted to put itself up for sale after creditors were unable to agree on a recapitalization plan.

The Dallas-based company said Monday that it has submitted a plan for an auction process to U.S. Bankruptcy Court in New York. A holding company formed by four if its largest creditors -- Monarch Alternative Capital, Owl Creek Asset Management, Stonehill Capital Management and Varde Partners -- has submitted an opening "stalking horse" bid of $290 million.

The offer is intended to create a floor for future bids, though if none come in, the company would end up in the hands of those creditors.

Billionaire corporate raider Carl Icahn, the largest owner of Blockbuster's debt, is not part of the stalking horse bid.

In a statement, Blockbuster Chief Executive Jim Keyes said the company hopes to draw offers from both strategic and financial investors. "This will...allow for the consolidation of ownership of the company to those with a clear and focused vision for Blockbuster's future," he said.

When Blockbuster filed for Chapter 11 bankruptcy protection in September, the owners of $630 million of its senior secured bonds said they intended to exchange their debt for full ownership of the company. That plan appears to have fallen apart in Bankruptcy Court proceedings, however, leading to the new sales process.

[Update, 5:43 p.m.: For more, see the story on the pending sale of Blockbuster in tomorrow's Times.]

--Ben Fritz

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Blockbuster files for Chapter 11 bankruptcy protection; sets plan to reorganize

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Comments

[Inthemix]

Thanks once last time for those ridiculous late charges and bogus fees Blockbuster. Good Riddance!

[Charlton Heston]

I offer $100.00, cash.

Really, who would buy this dinosaur?

[Robert]

Maybe $290.

[Rob M.]

Blockbuster, Borders, et al. They ripped us off. They failed to react to changes in the marketplace fast enough. They were arrogant until the end. Consumers are pretty smart these days. The people who run these companies and their investors? Not so smart.

[AJ Buttacavoli]

I recall the last time Blockbuster was sold it went for $600 million.

[Doug]

I Hope Time Warner buys them. They'll know what to do.

[evad the slayer]

Ha. I have to laugh at the below comments. It is obvious that BB pissed a lot of people off with their absurd late charges and other stupid business practices. Management was so fond of them selves that they ignore their own customer base and failed to modernize their business until netflix came along and ate them for breakfast, lunch and dinner. Justice has been done. Carl Ichan must have been bombed out of his gourd when he invested in this relic. Glad he lost his shirt.

[dead4movie]

this is a sad forecast for a movie industry

[DG3]

If BB went out of business, millions of trees wouldn't need to be cut down. Ever seen those receipts they give you? They're like banners!

[armen]

Their paper debt did them in. A 3 foot reciept is expensive.

[Troy]

I hope Blockbuster and all of its snotty, pimple-faced employees rot in hell. I still have the bitter memory of all those STUPID late fees they charged me for most of the late 20th century!

I have a Netflix DVD sitting in my living room that I've had for over two months. TWO MONTHS! And Netflix doesn't charge me a dime over my 10 bucks a month, and they'll happily send me my next DVD when I darn well get around to it on my own personal schedule. That's how a business should treat its customers! Not as criminals sent before the pimple-faced judge running the cash register at a lousy Blockbuster Video.

Good riddance to them! I will dance the dance of the righteous and order a large pizza in celebration when the Blockbuster near me in Orange on Tustin Avenue is shuttered and eliminated. HA!

[Big JIm Slade]

A fine example of what happens to a company that provides horrible customer service AND an obsolete product.

Ironically, I have an old car in the garage I'd like $300 million for as well. Doesn't run any more...

I'm pretty sure you'll lose less money on the car than on buying Blockbuster. Consider it an investment.

The genius that is Wall Street.

[LORDOFME]

Blockbuster? Whats that?

[dont worry about it]

wow!!! arrogant pimple faced employees, wow how nice and considerate of all of you. considering most employees are hard working mothers or fathers just trying to get by like everyone else and some maybe like my self putting them selves through school. but hey guess my face came up with alot of pimples over night? hmmm or im just arrogant. no! i dont think so! i do know for a fact that at my store and every other store ive worked for which is alot at bb. that not one employee treated any customer like crap or was arrogant in any way, and if anyone had a problem with their late fee's even though its your fault! in the first place! you know the rules! we took care of them! maybe if customers wouldn't have taking advantage of the no late fee policy and wouldn't have kept movies for over a year! which causing a dramatic less urn with rentals. we would be ok. but its the ones cheating the system. and to be frank. oooh .99 cent late fee a day ooohhhh red box does the same thing! and family video! charges the whole rental cost per day! and netflix you don't get nearly the same service treatment or benefits you do with bb. so to some it up. get over your selves realize how many people are affected and shut! up! you need to learn some respect!

[C-Davis]

Good riddance! I remember a time when I checked out 3 movies and 1 was due sooner than the others and I was charged a late fee even though there must have been at least 25 copies of that movie on the shelves. Then there was the Blockbuster habit of making movies due at noon on the due date rather than at the actual end of the day -- another way to pad Blockbuster's pockets. On one memorable occasion, I dropped the DVDs through the slot at the desk and the clerk couldn't find one and the way she acted, you'd think I had commited a mortal sin. In fact, I said, "For Gosh sake, Lady, it's a DVD, not my first born!" Then there was the time the store hired a teenage boy who did not know how to make change and short-changed me by $4. However, when I called and advised the manager, she just blew me off. Later, that same clerk was fired for stealing. In other words, stealing was okay as long as it didn't affect Blockbuster.

[shaun]

stop crying about fees, what you should be complaining about is the overdraft fees a bank gives when you spent .10 of there money ... thats a joke ! And if i recall every movie rental place was doing the same thing blockbuster was . I think if a company picks them up and turns them around that blockbuster will overdue everyone due to there name alone... they should stream and open more kiosk box... redbox sucks!!!!