Blockbuster Canada Shutting Down2 Sep, 2011 By: Erik Gruenwedel
Receiver Grant Thornton Ltd. Sept. 6 will file papers seeking to liquidate the 400-store chain
Bankrupt Blockbuster Canada is ceasing operations after prospective buyers of the chain could not be finalized, according to a filing with an Ontario court.
Grant Thornton Ltd., the receivership firm appointed by a Canadian court to oversee Blockbuster Canada’s bankruptcy, said it would file papers Sept. 6 seeking to dissolve the business and begin liquidation.
“As a result, the receiver does not have a firm, binding offer that it can complete in order to obtain value in excess of the liquidation value of the company’s assets,” Grant Thornton CEO Michael Creber said in the filing reported by The Globe and Mail.
Blockbuster Canada was a profitable subsidiary Dallas-based Blockbuster put up as collateral to Hollywood studios to ensure disc shipments after it filed for bankruptcy in September 2010.
Grant Thornton, which already had shuttered nearly 150 underperforming Blockbuster Canada stores, entertained offers from telcos BCE Inc., Rogers Communications, music retailer HMV Canada and grocery chain Sobeys Inc., among others. A point of contention for the telcos, however, was the 5,000-square-foot Blockbuster retail space — about twice the size of a typical telecom store.
In addition, new Blockbuster owner Dish Network during the summer filed papers asking Blockbuster Canada to cease using the Blockbuster name. Grant Thornton, at the time, said the loss of the Blockbuster name would severely restrict its ability to find a buyer for the chain and pay three U.S. studios owed about $67 million after the chain was put up as collateral.
The New York bankruptcy court overseeing Blockbuster Inc.’s Chapter 11 filing last month postponed a decision whether Blockbuster Canada could continue using the name.
Regardless, the chain had become symbolic in packaged media’s attempt to remain relevant in the eyes of investors, analysts and, to a lesser extent, consumers enamored with digital distribution.
“This is the Netflix decade for movies,” Kaan Yigit, president of consultancy Solutions Research Group, told The Globe and Mail. “Kids growing up will hardly ever know there was a time you actually went to a store to get a movie.”