Blockbuster Responds to Shareholder Group8 Sep, 2010 By: Erik Gruenwedel
Blockbuster Inc. declined to comment to a letter sent Aug. 29 by a shareholder group critical of the Dallas-based rental icon’s dearth of communication regarding recapitalization efforts and possible bankruptcy, among other issues.
The shareholder group, which claims to represent more than 26% of Blockbuster’s voting shares, said it is seeking legal recourse should the company file for bankruptcy.
Blockbuster’s investor relations department, in the response, said it was precluded from commenting directly on recapitalization efforts and other issues. Blockbuster also said it is company policy not to respond to “rumors or speculation.”
“We understand your desire for additional updates, and we will share additional information as we are able,” the company said.
Niko Celentano, who heads the group of 480 shareholders (www.blockbustershareholders.com), in the letter to Blockbuster CEO Jim Keyes, said the group feels shareholders have been “left in the dark” during protracted recapitalization talks with creditors.
“Pretty generic response, as to be expected,” Celentano said in an e-mail.
Blockbuster, citing debt of more than $980 million, is reportedly in discussions with studios and creditors regarding a pre-packaged Chapter 11 filing that could occur in the coming weeks.