By Caroline Humer
NEW YORK, March 10 (Reuters) - Parties to the Blockbuster Inc bankruptcy were in talks on Thursday outside of a courtroom where a judge was expected to either decide to sell the movie rental chain or essentially shut it down.
A court clerk said the hearing, which was supposed to begin at 10 a.m. EST (1500 GMT), was recessed till 1 p.m. because the various parties were in negotiations and had asked for more time to talk.
The company has been the subject of a tug of war among creditors for months.
Hedge fund Monarch Capital submitted a bid for the company, but that was opposed by a large number of landlords and Hollywood studios including Disney Co, who said the sale would unfairly shortchange them.
A U.S. Department of Justice official who monitors bankruptcies has requested that the company convert to a Chapter 7 liquidation, or essentially a going-out-of-business sale.
The U.S. government even weighed in, objecting to terms of the proposed sale that would protect the buyers from environmental liabilities for contaminated properties.
Bankruptcy Court Judge Burton Lifland called the hearing last week to discuss whether to allow the conversion to a liquidation under Chapter 7 or decide if an auction for the assets would go forward.
Billionaire investor Carl Icahn asked the court to leave open the possibility that he could bid for the company's assets, opposing a request by bondholders that he be blocked from the bidding because they said he was an insider.
Icahn resigned from the company's board last year.
Monarch is leading a group of four hedge funds, which together bid $290 million for the company's assets. In its most recent operating report, the company said it had about $1 billion in assets.
The case is In re: Blockbuster Inc, U.S. Bankruptcy Court, Southern District of New York, No. 10-14997.
(Reporting by Caroline Humer; writing by Tom Hals; Editing by Tim Dobbyn) Keywords: BLOCKBUSTER/ (caroline.humer@thomsonreuters.com; 1-646-223-6181; Reuters messaging: caroline.humer.thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
NEW YORK, March 10 (Reuters) - Parties to the Blockbuster Inc bankruptcy were in talks on Thursday outside of a courtroom where a judge was expected to either decide to sell the movie rental chain or essentially shut it down.
A court clerk said the hearing, which was supposed to begin at 10 a.m. EST (1500 GMT), was recessed till 1 p.m. because the various parties were in negotiations and had asked for more time to talk.
The company has been the subject of a tug of war among creditors for months.
Hedge fund Monarch Capital submitted a bid for the company, but that was opposed by a large number of landlords and Hollywood studios including Disney Co, who said the sale would unfairly shortchange them.
A U.S. Department of Justice official who monitors bankruptcies has requested that the company convert to a Chapter 7 liquidation, or essentially a going-out-of-business sale.
The U.S. government even weighed in, objecting to terms of the proposed sale that would protect the buyers from environmental liabilities for contaminated properties.
Bankruptcy Court Judge Burton Lifland called the hearing last week to discuss whether to allow the conversion to a liquidation under Chapter 7 or decide if an auction for the assets would go forward.
Billionaire investor Carl Icahn asked the court to leave open the possibility that he could bid for the company's assets, opposing a request by bondholders that he be blocked from the bidding because they said he was an insider.
Icahn resigned from the company's board last year.
Monarch is leading a group of four hedge funds, which together bid $290 million for the company's assets. In its most recent operating report, the company said it had about $1 billion in assets.
The case is In re: Blockbuster Inc, U.S. Bankruptcy Court, Southern District of New York, No. 10-14997.
(Reporting by Caroline Humer; writing by Tom Hals; Editing by Tim Dobbyn) Keywords: BLOCKBUSTER/ (caroline.humer@thomsonreuters.com; 1-646-223-6181; Reuters messaging: caroline.humer.thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.