Blockbuster insolvent - der Zock beginnt

News on BlockBuster     25 minutes ago    
Blockbuster Files Order to Divide Sale Proceeds

Blockbuster Inc. filed a proposed order yesterday laying out the complex formula for distribution of proceeds from the sale of the business that the bankruptcy judge tentatively approved at an April 7 hearing. If objections are filed by this morning’s deadline, the U.S. Bankruptcy Court in New York will hold a hearing on April 14 to decide what form of order should be signed for formal approval of the sale.

The proposed order contains formulas specifying how much will be paid to holders of the $630 million in secured notes, who won’t be paid in full, and to creditors with claims arising during the Chapter 11 case, who also won’t be paid in full.

Any outstanding fees and expense on the loan for the Chapter 11 case will be paid in full, together with $125 million in pre-bankruptcy secured notes that were converted by the post- bankruptcy lending agreement into a secured obligation of the Chapter 11 case.

The amount carved out for professionals in the post- bankruptcy loan agreement will be set aside, along with $12.5 million to cover expenses in winding down the company.

There is $10 million for what are deemed “critical expenses” and $7.4 million for movie studios. There is $4 million more to be divided among creditors with claims arising after the September Chapter 11 filing plus whatever is necessary to cover budgeted expenses during the sale process.

The remainder will be divided, with noteholders receiving 75 percent and 25 percent going to claims arising in the Chapter 11 case before the sale process began.

The final form of the sale agreement wasn’t attached to the proposed order.