Even in the throes of bankruptcy, Blockbuster can’t seem to catch a break. After having the motives of its CEO and largest shareholder recently called into question, now a group of BB’s unsecured creditors have filed a motion questioning the way the company is going about repaying its debts to major movie studios.
According to Home Media Magazine, “Specifically, the creditors are concerned that Blockbuster is rushing millions of dollars in payments to select studios with little or no guarantees they will honor revenue-sharing agreements (which expire Dec. 31) or continue delivering content to Blockbuster under existing or favorable terms.”
The author of the motion and representative of the creditors, Jay Indyke, said the following about his clients’ concerns:
“You don’t just transfer money on pre-petitioned debt in exchange for a promise to negotiate [down the road] in good faith,” he said. “It’s not enough to send people money and hope they do business with you . . . If [Blockbuster has] accommodations in place with studios for appropriate extensions of time, then we’re not going to have issue with respect to the payments . . . If there are studios that have not done it, then we do have issues.”
Are BB’s creditors’ concerns unfounded, Insiders? Would Hollywood studios, who have an interest in seeing Blockbuster survive, cease to give BB favorable terms on content or discontinue revenue-sharing? Hit the comments and leave your opinion.
(via Home Media Magazine)