Blockbuster Receives Court Approval of "First Day Motions"

DALLAS, Sept. 23 /PRNewswire-FirstCall/ -- Blockbuster Inc. (Pink Sheets: BLOKA, BLOKB), a leading global provider of rental and retail movie and game entertainment, today announced that the U.S. Bankruptcy Court for the Southern District of New York has granted approval of "First Day Motions" requested by the Company to help enable it to conduct business in the ordinary course as it moves to recapitalize its balance sheet and substantially reduce debt.

All of Blockbuster's U.S. operations, including its stores, DVD vending kiosks, by-mail and digital businesses, are open and serving customers in the normal course. Blockbuster is fulfilling all orders as usual, including continuing to provide access to new releases the first day they become available.  

On September 23, 2010, as part of its voluntary filing for reorganization under Chapter 11 of the U.S. Bankruptcy Code, the Company submitted First Day Motions designed to support its domestic customers, vendors and employees. At a hearing later that day, the Court granted permission for the Company, among other things, to:

• Continue honoring its Rewards program, valid coupons, gift cards and other customer programs;

• Pay its employees in the usual manner and to continue their primary benefits without disruption;

• Continue to maintain its cash management systems;

• Pay certain pre-petition claims of movie studios.

The Court also authorized Blockbuster to access up to $20 million of the new $125 million Debtor-in-Possession (DIP) financing provided by the Senior Noteholders on an interim basis to help meet its obligations to customers, suppliers and employees during the recapitalization process. The Company will seek final approval of the entire DIP financing at a future court hearing. Blockbuster intends to pay suppliers under normal terms in the ordinary course for all post-petition goods and services.

Jim Keyes, chairman and chief executive officer, said, "The authorization granted by the court is an important first step in our recapitalization process. With the continued support of the Senior Noteholders, the movie studios and other key parties, we intend to complete the recapitalization expeditiously and emerge with our debt substantially reduced. With a strengthened balance sheet, Blockbuster will be in a better position to continue the transformation of our business model and demonstrate to our customers the convenience and value of our multi-channel platform and our 28-day rental advantage."

Additional information about the recapitalization is available at www.Blockbuster.com/recapitalization or by telephone at 877-660-6684 or 732-645-4110. General information for Blockbuster customers is available at www.Blockbuster.com or by calling 1-866-692-2789.

About Blockbuster Inc.

Blockbuster Inc. is a leading global provider of rental and retail movie and game entertainment. The Company provides customers with convenient access to media entertainment anywhere, any way they want it - whether in-store, by mail, through vending kiosks or digitally to their homes and mobile devices. With a highly recognized brand and a library of more than 125,000 movie and game titles, Blockbuster leverages its multichannel presence to serve nearly 47 million global customers annually. The Company may be accessed worldwide at www.blockbuster.com.

Forward Looking Statements 

This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  Forward-looking statements may also be included from time to time in our other public filings, press releases, our website and oral and written presentations by management.  Specific forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and include, without limitation, words such as "may," "will," "expects," "believes," "anticipates," "plans," "estimates," "projects," "predicts," "targets," "seeks," "could," "intends," "foresees" or the negative of such terms or other variations on such terms or comparable terminology.  Similarly, statements that describe our strategies, initiatives, objectives, plans or goals are forward-looking. These forward-looking statements are based on management's current intent, belief, expectations, estimates and projections.  These statements are not guarantees of future performance and involve risks, uncertainties, assumptions and other factors that are difficult to predict.  Therefore, actual results may vary materially from what is expressed in or indicated by the forward-looking statements.  The risk factors set forth under "Item 1A. Risk Factors" in our Annual Reports on Form 10-K and other matters discussed from time to time in our filings with the Securities and Exchange Commission, including the "Disclosure Regarding Forward-Looking Information" and "Risk Factors" sections of our Quarterly Reports on Form 10-Q, among others, could affect future results, causing these results to differ materially from those expressed in our forward-looking statements.  Currently, the risks and uncertainties that may most directly impact our future results include (i) the ability of the Company to continue as a going concern; (ii) the Company's ability to obtain Bankruptcy Court approval with respect to motions in the chapter 11 cases; (iii) the ability of the Company and its subsidiaries to prosecute, develop and consummate one or more plans of reorganization with respect to the chapter 11 cases; (iv) the effects of the Company's Bankruptcy Filing on the Company and the interests of various creditors, equity holders and other constituents; (v) Bankruptcy Court rulings in the chapter 11 cases and the outcome of the cases in general; (vi) the length of time the Company will operate under the chapter 11 cases; (vii) risks associated with third party motions in the chapter 11 cases, which may interfere with the Company's ability to develop and consummate one or more plans of reorganization once such plans are developed, including the currently proposed plan; (viii) the potential adverse effects of the chapter  11  proceedings on the  Company's  liquidity  or  results of operations; (ix) the ability to execute  the Company's business and restructuring plan; (x) increased legal costs related to the Bankruptcy Filing and other litigation; (xi) the Company's ability to maintain contracts that are critical to its operation, to obtain and maintain normal terms with customers, suppliers and service providers and to retain key executives, managers and employees.  In the event that the risks disclosed in our public filings and those discussed above cause results to differ materially from those expressed in our forward-looking statements, our business, financial condition, results of operations or liquidity could be materially adversely affected and investors in our securities could lose part or all of their investments.  Accordingly, our investors are cautioned not to place undue reliance on these forward-looking statements because, while we believe the assumptions on which the forward-looking statements are based are reasonable, there can be no assurance that these forward-looking statements will prove to be accurate. Further, the forward-looking statements included in this release and those included from time to time in our other public filings, press releases, our website and oral and written presentations by management are only made as of the respective dates thereof.  We undertake no obligation to update publicly any forward-looking statement in this release or in other documents, our website or oral statements for any reason, even if new information becomes available or other events occur in the future.

SOURCE Blockbuster Inc.