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Gallery Shareholder Offers Capital Proposal

28 Apr, 2006 By: Jessica Wolf

Major Movie Gallery stockholder Schultze Asset Management (SAM) is proposing the company raise funds via a shareholder rights offering, which would set aside preferred stock for purchase by existing shareholders.

In a report SAM filed with the Securities and Exchange Commission Wednesday, April 26, the management asset firm recommended a rights offering could be used to raise capital from existing shareholders and used to reduce bank debt, which would allow for reduced interest expenses and increased cash for general corporate purposes.

SAM and its founder, George J. Shultze, own nearly 3 million shares of Movie Gallery common stock, about 8.6% of the company's outstanding common stock.

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