Blockbuster gets approval for 'First Day Motions'
DALLAS - Blockbuster announced that the U.S. Bankruptcy Court for the Southern District of New York has granted approval of "First Day Motions" requested by the company to help enable it to conduct business in the ordinary course as it moves to recapitalize its balance sheet and substantially reduce debt.
All of Blockbuster's U.S. operations, including its stores, DVD vending kiosks, by-mail and digital businesses, are open and serving customers in the normal course. Blockbuster said it is fulfilling all orders as usual, including continuing to provide access to new releases the first day they become available.
The Court also authorized Blockbuster to access up to $20 million of the new $125 million Debtor-in-Possession (DIP) financing provided by the Senior Noteholders on an interim basis to help meet its obligations to customers, suppliers and employees during the recapitalization process. The company said it will seek final approval of the entire DIP financing at a future court hearing. Blockbuster intends to pay suppliers under normal terms in the ordinary course for all post-petition goods and services.
Jim Keyes, chairman and CEO, said, "The authorization granted by the court is an important first step in our recapitalization process. With the continued support of the Senior Noteholders, the movie studios and other key parties, we intend to complete the recapitalization expeditiously and emerge with our debt substantially reduced. With a strengthened balance sheet, Blockbuster will be in a better position to continue the transformation of our business model and demonstrate to our customers the convenience and value of our multi-channel platform and our 28-day rental advantage."