Courts OK Gallery Use of Available Cash to Maintain Operations

4 Feb, 2010 By: Erik Gruenwedel

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A bankruptcy court Feb. 4 has approved a motion allowing Movie Gallery Inc. to use available cash on hand to maintain operations, including paying employee salaries and benefits; honoring customer programs, memberships, gift cards and store credits; and paying vendors.

Usually a perfunctory move by the court, it is nonetheless important because without access to funds, Gallery’s ability to maintain day-to-day operations would likely cease.

Gallery, the No. 2 DVD rental company in the United States, filed for Chapter 11 bankruptcy protection Feb. 3 with U.S. Bankruptcy Court for the Eastern District of Virginia, Richmond Division — a move that will result in the immediate closure of about 760 Gallery and Hollywood Video stores.

The bankruptcy does not affect Gallery’s Canadian operations.

Gallery also retained the services of DJM Realty to assist it in evaluation and renegotiation of current leases in order to help improve the profitability of the store base going forward.

Gallery or Hollywood Video landlords are encouraged to contact DJM Realty (www.djmrealty.com) at 631/752-1100 for more information.
 

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