Andre Yoskowitz
4 Feb 2011 16:40
Summit Distribution, the studio behind the blockbuster franchise 'Twilight,' is demanding that struggling rental chain Blockbuster pay up what it owes, or head into liquidation.
When Blockbuster filed for bankruptcy last year, it told Summit it would not pay Summit the $6.8 million it was owed for DVDs shipped out.
Summit is now demanding a judge force Blockbuster to pay up, or head into liquidation where it will raise the money needed.
Blockbuster went into Chapter 11 bankruptcy in September, giving the company a chance to reorganize debt without liquidating. If the company cannot recover, it will be forced into Chapter 7 where the full management team will be replaced and all of the rental company's assets will be sold off to pay debts.
Summit's latest, 'The Twilight Saga: Eclipse,' was the 4th most popular DVD in 2010.
Reads the court documents (via Yahoo):
To Summit's surprise and dismay, the debtors informed Summit that the debtors would not pay Summit with respect to products that were shipped post-petition (after the bankruptcy filing) because the debtors lacked the funds to do so.