Blockbuster landlords object to 'open-ended' store closing sale motion

By Caroline Salls

Pittsburgh, Jan. 6 - A group of Blockbuster Inc. landlords objected to the company's motion to continue to conduct store closing and bulk inventory sales, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The landlords said the store closing motion "does not indicate over what period of time the sales might occur, how many stores might be involved, what type of notice will be provided to the landlords or what will happen at the end of the sale period."

In addition, the landlords said Blockbuster's proposed store closing guidelines are "woefully deficient" and vary from the guidelines they have typically negotiated with professional liquidators over the past several years.

Specifically, the landlords said they usually address proposed going-out-of-business sales in the context of a fixed store-closing program to be carried out over a relatively short period.

"Here, everything appears to be open-ended - transforming non-ordinary course, lease prohibited sales into the ordinary course of business," the landlords said in the objection.

"The Bankruptcy Code does not provide for such a course of conduct."

A hearing is scheduled for Jan. 20.

Blockbuster, a Dallas-based provider of in-home movies and game entertainment, filed for bankruptcy on Sept. 23. Its Chapter 11 case number is 10-14997.

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