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BB LIQUIDATING INC. Message Board

  • dstrouss dstrouss Jul 17, 2011 12:35 PM Flag

    Did Dish assume the secured debt?

    According to the recently published 10-K the company owned the following subsidiaries.

    Blockbuster Argentina, S.A.
    Blockbuster Canada Co.
    Blockbuster Canada Inc.
    Blockbuster Entertainment (Ireland) Limited
    Blockbuster International Spain Inc.
    Blockbuster Italia, S.p.A.
    Blockbuster Polska Sp. Z.o.o.
    Blockbuster Video Espana S.L.
    Blockbuster Video Italy, Inc

    All the common shares of the UK, Mexico, Denmark, and Uruguay subsidiaries were apparently part of the purchase by Dish. Although the Schedules and Exhibits to the purchase agreement have not been published the author of this statement must have knowledge of their contents. That ,of course, would be subject to later revisions up to the latest date possible, which, of course, is subject to extensions to the time period.

    The curious part of this revelation is the now established law concerning the purchase of shares of non debtor subsidiaries in asset sales. It appears that the purchase of “Operating Assets” can be done in Bankruptcy sales under section 363 of the BK code, “free and clear of all liens or encumbrances‘”, However when you start purchasing “shares” of non debtor subsidiaries, it gets real sticky. Under settled law you may have to assume the debt that these subsidiary shares guaranteed. See the link to an article about this.

    http://www.wilmerhale.com/publications/whPubsDetail.aspx?publication=3448

    The secured notes of Blockbuster were secured by all the assets of the debtor, which includes the shares of all the non debtor subs according to my understanding. The lawyers for Dish undoubtedly understand the risk associated with the purchase of these shares and are ok with that fact. This may be evidence that all the secured notes have been assumed by Dish.

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    • Dstrouss. It is very possible that all the debt including the unsecured were assumed by Dish. The stalking horse bid of 320 million seems to be very low unless the debt was assumed. Could this be the reason that no objections were filed by anyone from the UCC including Lyme Regis who seemed to object to most everything before the auction. The shares and the NOL's which hold a lot of value is still being target by the bashers. I have a feeling that these shares will be worth quite a bit very soon.

      • 3 Replies to tazmaster1965
      • Of course it does Taz. The studios were owed 114 million for post petition product in current and future payments under the revenue sharing agreements. If you consider that the studios actually sold all the post petition store product to the purchaser for about 16 million dollars, Dish received a value of 98 million just in store product. Add to that the cash, the cash in the non debtor subs (no one knows what that was), all the rest of the DVDs, any stores their heart desires (stores that were instantly profitable with the new pricing), the By Mail segment that is going to get some new subscriptions due to the new pricing by Netflix (this has been known to be coming and many have been predicting it on the basis of the studio "partners" actions), the brand name along with the heavily supported Digital segent, and profitable non debtor subs, It begins to look like and utter scam.

        Jim Keyes who orchestrated this scam went with the assets to Dish, how funny. Dish suddenly has need of 7000 newly created employee positions according to their career opportunity ads on the BB website. sounds like the stores are real busy due to the little promotions they are doing with all that free studio product and other inventory.

        I'm betting that in the end Dish assumes a few more store leases than all these journalists think. Already up to about 1300 according to the filings. And who thinks the By Mail segent won't grow a little as well, you get games and new releases you don't get at Netflix, and store returns.

        I actually don't think Dish paid squat for the assets which are guaranteed to be profitable right out of the gate, Jim Keyes will see to that.

      • I have a feeling that there is an agreement in place to leave $$ for the commons/NOL ... any court discussions regarding assets all take place behind closed doors ... the judge I feel is aware that there would be speculation if this was announced as a final number is not yet arrived at(due to outstanding business ..NCR, Canada) ... I think the judge has issued a gag order on the announcement hence his annoyance at Iconn (I suspect with his 'worst investment' meassured announcement) referenced at the LR hearing and the judge's reluctance to rule in favor of Iconn.

        So what is that final number??

        PS I dont rule out Iconn ending up with the NOL

    • Of course we heard no objections from the creditors committee although a Trustee liquidation would undoubtedly have resulted in a distribution to at least some classes of creditors, like say the studios who are represented by their own committee. No objections at all, which raises the question, why are they all so happy with a deal that looks like it pays them nothing? Perhaps all these millionaires are not so stupid afterall.

      • 2 Replies to dstrouss
      • Disclaimer before I ask you a question: I'm not a paid/unpaid basher. I actually hate those douchebags. I've been mostly reading seldom commenting in this mb for the past couple of months daily. (this mb and the controversy is really interesting for a new guy like me putting the puzzle together of what you guys talk about . I Own bloaq @.08. I work for dish network for customer service in NYC. I am ery interested in this stock be because of the huge potential and how dish is going to use blockbuster brand in every way possible that will make it huge. Obviously we don't know the impact that would have in this "shell".

        Finally here is my question with all due respect:for the paid/bashers, they have a reason to come here and bash maybe because they are paid or they know this will jump up & make profit so it's interesting forthem to make people sell. But for you as far as I can tell by reports on etrade being one of the largest private owners of this stock (correct me if I'm wrong) what would be in it for you to not be a basher? If it's a secret gem, wouldn't you want to keep it for yourself and buy more? Please know this is not a malicious question and this is my first time I read a mb for stocks. Quite interesting I might say.


        Btw reason why I ask is because I want to make money and am educating myself. But that you already knew lol

      • Bill, is there anyway they can use the nol's without us? and if they cancel the shares does that wipe out the nol's?
        TIA, Mark

    • Keep in mind that they signed a confidentiality agreement. They are not allowed to disclose anything until all the negotiations are final. Any disclosure will result in liability.

    • "And just because they haven't assumed the debt doesn't mean they won't."

      gee whiz billy you ask if dish assumed the debt then admit they havent assumed it are you drinking spiked koolaid today?

    • Hey bonds

      Have you been able to contact anyone at the Bank of new york mellon, who is the trustee for the bonds, to confirm or deny there will be no payout for the bonds? I talked to indyke, I did not talk to the Dish lawyer. I can't seem to find any info on who to contact at the Bank of New york mellon. Seems to me as the trustee for the bonds they need to put out something about these bonds especially if they are planning on allowing Blockbuster to walk away with $300 million of investor money without recovering a penny for investors that they represent.

    • I would say that BBI would have done the same thing, and would have done great things if they didn't have their debt problem and horrible management. Dish will see its share of the benefits it gained from its acquisition of the BBI assets. But because the debt has to be discharged in its entirety before BBI shareholders ever see a dime, they will disappear in the lava. Thats just the way it works !! Been through too many BK sagas to think otherwise. BL to you (post BBI) just the same. If I thought the risk/reward dynamic dictated it, I would try it. No sign of life. You are looking in the wrong place, or from the wrong perspective. Thats the best way I can explain it.

    • Is it a shameful act to express an opinion right or wrong? You have done the same for more than a year right here on the message board. Do you feel what you have done is shameful?

    • please show one document that states dish assumed any debt can you do that no because every filing states the opposite now why is that?

    • Exactly. The broker is misinformed

    • Mustang: They are just collaborating with the 8k and 10k statements. As of now the shareholders and bondholders get nothing. But in a month or two when negotiations are finalized, it will become apparent that the shares will be left intact and the bonds will be converted into equity.

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