Blockbuster to Cancel Leases on More Than 150 U.S. Stores Before Auction
Blockbuster Inc. (BLOAQ) the bankrupt movie-rental chain, intends to cancel leases on more than 150 U.S. stores and abandon any property left in the buildings to the landlords.
Blockbuster, based in Dallas, listed the leases it plans to cancel in two motions filed yesterday in U.S. Bankruptcy Court in Manhattan. Such announcements usually mean a retailer plans to either close the store associated with the lease or attempt to renegotiate its rent.
Any property left in the stores “shall be deemed abandoned,” Blockbuster said in the motions. The company listed stores in more than a dozen states, including New York, Texas, California, Florida and Illinois.
Blockbuster, once the world’s largest movie-rental chain, won permission this month to sell itself at auction after receiving a $290 million bid from hedge funds.
The company filed for bankruptcy on Sept. 23 and had been locked in dispute with movie studios and other unsecured creditors about whether it can sell its assets to hedge funds that loaned Blockbuster money to operate in bankruptcy.
Blockbuster began reorganizing with 5,600 stores, including 3,300 in the U.S. The bankruptcy petition listed assets of $1.02 billion and debt of $1.47 billion.
After bankruptcy, Blockbuster rejected about 220 leases for stores that were closing. Blockbuster said it would shut 72 additional stores by the end of 2010 and about 110 more this quarter.
The case is In re Blockbuster, 10-14997, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
To contact the reporter on this story: Steven Church in Wilmington at email@example.com
To contact the editor responsible for this story: David Rovella at firstname.lastname@example.org