Tuesday, March 3, 2009

Blockbuster Has No Plans To File For Bankruptcy

Blockbuster denies hiring Kirkland & Ellis to explore bankruptcy, and instead K&E's role will be to assist with refinancing. We do have our doubts as usually every K&E involvement ends up in a monthly retainer filed on Whitehall street, but we'll go with the company on this one.

Bloomberg amends it prior release:

“We’ve hired them for refinancing and capital raising initiatives,” said Karen Raskopf, a Blockbuster spokeswoman..“We do not intend to file for bankruptcy.”

Blockbuster is working with Kirkland and Ellis on refinancing, Raskopf said. The company previously announced plans to fund its own operations through the end of 2009 after two of its credit facilities expire this August, she said.

“Balance sheet issues are easily solved with a prepackaged or prearranged bankruptcy,” said Paul Silverstein, a lawyer with Andrews & Kurth LLP, [ed. and a distinguished cigar aficionado in legal circles] who has no connection to Blockbuster. Silverstein, speaking in a phone interview, said operational issues and business problems are less easily solved with such filings.
Tiffany Kary, who allegedly has a penchant for traipsing around bankruptcy court in skin tight pants and other provocative clothing and who wrote the original article, may soon incur the wrath of retail shareholders who sold their holdings at an 80% discount after her earlier, poorly-phrased article, made it seem that bankruptcy is a certainty. The only redeeming event would be if BBI were to really file for bankruptcy now before the class action suits start flying (however looking at BBI's Yahoo message boards, class action lawyers are already pitching their services). Sphere: Related Content
Print this post