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Individual Blockbuster Shareholders Seek Documents

22 Dec, 2010 By: Chris Tribbey

A committee representing more than 35 individual Blockbuster shareholders will ask a New York bankruptcy judge Jan. 20 to disclose documents regarding business decisions made before the company filed for bankruptcy.

Collectively the shareholders hold more than 27.5 million shares of Blockbuster.

“The Ad Hoc Committee believes that the value of the debtors’ enterprises is worth considerably more that the $1.2 billion value line set by the debtors,” court documents filed Dec. 22 state. “In fact, the Ad Hoc Committee has had detailed discussions with many potential investors who also believe in this value of the debtors.

“Unfortunately, the public information available to the Ad Hoc Committee is sufficiently opaque so as to make an accurate valuation — and hence an investment decision — impossible,” according to the documents. “Accordingly, the Ad Hoc Committee is seeking certain discrete, limited information from the debtors that will allow the Ad Hoc Committee and potential investors the ability to render an accurate valuation of the debtors’ estates.”

The investors are seeking all documents from Jan. 1, 2009, that detail financial arrangements between Blockbuster and Comcast, Verizon, Hewlett-Packard, Google, Samsung, Motorola, NCR Corp., Sonic Solutions and Best Buy.

The investors also want a breakdown of operating expenditures of Blockbuster’s digital entertainment division, and “all reports regarding studies or market tests concerning movie rental pricing or rental periods.”

A lawyer representing the investors could not be reached for comment.

Dallas-based Blockbuster filed a pre-packaged Chapter 11 filing in late September, listing debts exceeding $1.4 billion. On Dec. 10, the company extended until Jan. 14 the deadline to file a reorganization plan, and until Jan. 15 the deadline for a new business plan.

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