Blockbuster being auctioned off today

By on April 4, 2011, 1:01 PM
Bankrupt movie rental chain Blockbuster is being auctioned off today. Multiple bidders will fight for the rights to the company's next owner as well as the amount of money available to pay off its claims. The auction could preserve Dallas-based Blockbuster as an ongoing business, although bidders also have the option of liquidating the company, or closing it.

Satellite television company Dish Network and billionaire investor Carl Icahn qualified for the auction by submitting bids last week, according to people familiar with the matter cited by The Wall Street Journal. Another possibility is South Korea's SK Telecom, which we reported on last week.

Bids for the movie-rental chain were due Thursday evening, and potential suitors have been considering whether to take on a group of hedge funds led by Monarch Alternative Capital that already offered to buy Blockbuster for about $290 million. A hearing before bankruptcy Judge Burton Lifland will take place on April 7 to approve the new owner.

Blockbuster was once the world's largest video chain with a market cap of more than $5 billion at its peak in 2002. It started to fall apart after pressure from mail-order and digital competitors such as Netflix.

In September 2010, Blockbuster filed for Chapter 11 bankruptcy protection in the US. Two months ago, Blockbuster asked the New York bankruptcy court overseeing its Chapter 11 case to allow it to conduct an auction for the company. The company decided to put itself up for sale (and is hoping a transaction will take place by April 20) after a reorganization plan fell apart late last year.

User Comments: 5

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LNCPapa LNCPapa said:

I would've liked to give $100 for Blockbuster just for the pleasure of liquidating them and donating the liquidation proceeds to helping the homeless in the US.

Rick Rick, TechSpot Staff, said:

When your business model can be replaced by a vending machine, you have failed.

war59312 said:

I (and probably thousands more) were screaming (both literally and online) for Blockbuster to buy out Netflix right when they started getting big a few years back, but no, Blockbuster thought companies like Netflix were only a FAD.

I guess Blockbuster was the FAD. ******! Glad they are going out of business. Nothing but problems in my neck of the woods. In fact so bad, we (the neighbor community) had our local once shut down over a year ago. It sucked. Rip off artists!

So no crying from me!

captaincranky captaincranky, TechSpot Addict, said:

When your business model can be replaced by a vending machine, you have failed.
I believe that Blockbuster briefly dabbled in vending DVDs by machine also. The machines were gray, and DVDs were supplied in standard sales boxes, in lieu of custom tailored cases a la "Redbox".

I think the marketing name was, "DVD Express".

It would seem that the kiosk vending model didn't work for Blockbuster either.

treetops treetops said:

There vending prices were probably insane like there rental prices. I feel no pity for them they bullied out all of the grocery store video rental stores and mom and pop video stores. If they were smart they would have just copied netflix, with there logo they would have destroyed netflex. But low and behold they did not strike while the iron was hot.

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