Gallery Seeks to End License with Wattles29 Nov, 2007 By: Erik Gruenwedel
Bankrupt Movie Gallery Inc. last week filed a motion with the U.S. Bankruptcy Court in Virginia seeking to reject a license agreement with Mark Wattles, founder of Hollywood Entertainment Corp.
Wattles, who sold Hollywood Video to Gallery in 2005 for $1.1 billion, retained operations of, and right to sell back to Gallery, about 20 Hollywood Video locations under a license agreement.
Gallery or Wattles never agreed to a purchase price for the stores, and in March Wattles demanded arbitration to resolve the matter, according to the court filing.
Following the bankruptcy filing, Gallery said it no longer wished to remain in a business relationship with Wattles.
Separately, the court ruled Gallery could continue business relationships, including payments, with second-tier vendors.The court previously ruled for a similar deal with major content suppliers, including the studios.