Icahn, Dish, Others Vie for Bankrupt Blockbuster
Billionaire investor Carl Icahn squared off against Dish Network Corp (DISH.O) and other suitors for Blockbuster Inc (BLOAQ.PK) at a bankruptcy auction to decide the movie rental chain's next owner and perhaps whether the company survives.
Icahn, the activist investor and an owner of a large amount of Blockbuster senior debt, showed up in person on Tuesday at the auction in federal bankruptcy court in Manhattan, taking a front row seat in a packed courtroom.
Bidding reached $310 million by late Tuesday afternoon for Blockbuster, the world's largest movie rental chain.
The auction also attracted bids from Cobalt Video, a group of hedge funds led by Monarch Alternative Capital, and South Korea's SK Telecom Co Ltd (017670.KS).
SK Telecom dropped out after Blockbuster decided its $284.5 million bid was too low. David Feldman, a lawyer for SK Telecom, had argued the company's distribution agreements with Fox, Sony and Universal studios added value to its bid.
Blockbuster filed for Chapter 11 protection from creditors last September after foundering for years under intensifying competition from mail-order and digital competitors such as Netflix Inc (NFLX.O).
The Dallas-based company put itself up for sale in February after a reorganization plan fell apart.
Blockbuster has already shut roughly two-thirds of its stores and the auction could determine whether the company stays in business or closes its 1,700 remaining stores.
Whoever wins the auction could decide to preserve Blockbuster as an ongoing business, or liquidate the company. Proceeds from a sale would go toward the bankruptcy estate.
The Icahn group includes liquidator Great American Corp and others. Icahn was once Blockbuster's largest shareholder.
The case is In re: Blockbuster Inc, U.S. Bankruptcy Court, Southern District of New York, No. 10-14997.