Movie Gallery seeks approval of agreement to maintain studio support

By Lisa Kerner

Charlotte, N.C., March 3 - Movie Gallery, Inc. is asking the court to approve the debtors' entry into an accommodation agreement with movie suppliers Paramount Home Entertainment, Sony Pictures Home Entertainment, Universal Studios Home Entertainment, VPD IV, Inc., and Twentieth Century Fox Home Entertainment, according to a filing with the U.S. Bankruptcy Court for the Eastern District of Virginia.

The debtors are also seeking the authority to pay prepetition obligations to the studios and to any studio suppliers of movies other than the major studios (the B studios).

According to the filing, the debtors have no chance of reorganizing without the support of each of the studios.

"If the debtors' relationships with them deteriorate any further, the studios might cease supplying new movies altogether or might agree to supply new movies only on even less favorable trade terms, which could include their abrogation of the revenue sharing agreements that are so favorable for the debtors," the filing said.

Movie Gallery, a Wilsonville, Ore.-based video and game rental company, filed for bankruptcy on Feb. 2. Its Chapter 11 case number is 10-30696.

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