Blockbuster announced Friday that an auction process for the company's sale has been approved by the U.S. Bankruptcy Court for the Southern District of New York.
Blockbuster filed for Chapter 11 bankruptcy in September 2010 when it had more than $900 million debt, in order to reorganize its finances and operations.
In February 2011, the company entered into a "stalking horse" purchase agreement with Cobalt Video Holdco, a limited liability company formed by Monarch Alternative Capital, Owl Creek Asset Management, Stonehill Capital Management and Värde Partners.
“We are pleased that the court has authorized us to proceed with the auction process, which we believe represents the best opportunity to move the company forward and maximize value for our stakeholders," said Jim Keyes, Blockbuster Chairman and Chief Executive Officer.
The auction will be conducted under the Court's supervision in accordance with Section 363 of the U.S. Bankruptcy Code. Get real-time Blockbuster quotes here.