A group of disgruntled shareholders may be seeking legal recourse should Blockbuster follow through with its alleged plans to file for bankruptcy in the next few weeks. Led by Niko Celentano, the group of 480 shareholders represents about a quarter of BB’s total voting shares. In a letter dated August 29, Celentano informs BB CEO Jim Keyes that his group will “prepare legal representation” should bankruptcy occur.
Celentano feels that he and his fellow shareholders have been “left in the dark” during BB’s lengthy discussions with its creditors, and believes that his group should be part of Blockbuster’s turnaround efforts. From the letter:
“With the news out now that Blockbuster is looking to file a bankruptcy, you have left us no choice but to prepare our legal representation should this occur and we as shareholders, not be included in any settlements. Please understand this loyal group of shareholders has stuck with the company through this tough time and fully expect to be part of the turnaround that is ahead. We still are hopeful that Blockbuster will be able to complete an out of court settlement here as this would be in the best interest of all involved.
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Will this letter have any effect on Blockbuster’s seemingly inevitable appointment with Chapter 11? What legal action might Celentano and company take against a bankrupted BB?
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(via Home Media Magazine)
Message to Niko Celentano of the Bronx, and the group of 480 [intelligent ;) SIC] shareholders…
You can’t beat a dead horse and expect it to get up–let alone win the Belmont Stakes!
The big problem with BB is it is not only over burdened with un-serviceable debt, but also, its few remaining assets continue to decline in value, so even liquidation is a lose only proposition.
Take a loss…move on and forget-about-it!!
I am not really sure what they expect from their stock that is worth 8 cents a share currently. If they want their benefit from their stock, perhaps they should sell it before they actually claim bankruptcy?
I agree with the 2 above posts. They should move on. But, hey, I love it when BB looks bad, so…
The only perk that awaits Blockbuster shareholders at this point is the large tax deduction they will be granted when their stock becomes absolutely worthless.
Blockbuster has no chance whatsoever. Even if the company were to liquidate, what creditor is going to accept hundreds of copies of used DVDs as repayment? It’s really a double-edged sword for any Blockbuster investor: if the company files for bankruptcy, the company continues to lose money and value. If it files for liquidation, the compensation to investors will be mediocre to say the least. Which lesser of two evils will the people pick (pick liquidation!)?