Blockbuster Creditors Cleared to Probe Icahn Deal

Tuesday, 23 Nov 2010 12:11 AM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
Creditors of Blockbuster Inc. received court approval to investigate events leading to the movie rental company's bankruptcy, a reorganization that will hand control to billionaire Carl Icahn.

Judge Burton Lifland approved the request by the official committee of unsecured creditors to probe the circumstances surrounding the negotiation of the deal with Icahn, which was drafted just prior to Blockbuster's bankruptcy filing in September.

Unsecured creditors wanted to look into the plan because it would give them what they called a minimal return at best. Shareholders would get nothing.

That agreement proposes to turn the equity of the top U.S. video chain over to a group of senior bondholders, including Icahn, in return for what they are owed.

Icahn and his fellow bondholders also put up $125 million to fund Blockbuster's operations while in bankruptcy, which put them ahead of others in line for repayment.

The agreement with Icahn also puts the company on a relatively tight schedule for its reorganization. For example, unsecured creditors have to file any legal action that stems from their investigation by Dec. 26.

Blockbuster filed for bankruptcy in September in U.S. Bankruptcy Court in Manhattan.

© 2014 Thomson/Reuters. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web

Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 

You May Also Like
Around the Web

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved