Blockbuster Priority Auction Claims Unfair: Lenders

Law360, New York (March 1, 2011, 7:58 PM EST) -- Creditors are calling the proposed auction of bankrupt Blockbuster Inc. fundamentally unfair for attempting to establish a class of superpriority claims, while the bankruptcy trustee recommends converting the Chapter 11 case into a liquidation.

Objections to Blockbuster's sale motion flooded the U.S. Bankruptcy Court for the Southern District of New York on Monday and Tuesday, one week after the video rental chain announced a plan to sell itself at auction armed with a purchase agreement from a stalking horse bidder promising at least $290 million....
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