By : Erik Gruenwedel | Posted: 24 Mar 2010
A U.S. bankruptcy court in Richmond, Va., has authorized Movie Gallery to pay $7.8 million in pre-petition claims to four major studios and a distributor.
The payments include partial revenue-sharing amounts due to Paramount Home Entertainment, Sony Pictures Home Entertainment, Universal Studios Home Entertainment, 20th Century Fox Home Entertainment and distributor VPD, according to a March 24 court filing.
It wasn’t immediately clear why Warner Home Video, which is owed more than $9.5 million, was not included in the list.
The court authorized the payments in an effort to continue studio shipments of DVD and Blu-ray Disc titles to operating Gallery and Hollywood Video locations.
Wilsonville, Ore.-based Gallery, which owns Hollywood Video, in February filed for Chapter 11 bankruptcy protection for the second time, citing $540 million in debt, including $45 million owed to studios and distributors.
Among studio creditors, Sony Pictures is owned $9.3 million and Fox $8.2 million. Universal is owned $7.7 million, Paramount $6.9 million and VPD $2.9 million.
The court authorized, but did not order, Gallery to pay similar claims to so-called “B” studio creditors, including Starz Home Entertainment, which is owed $645,000, and Image Entertainment ($351,000), among others.
Gallery, which operated about 2,600 stores domestically at the time of the filing, has shuttered more than 1,200 underperforming location since.