Blockbuster Creditor Escapes Icahn's Sanctions Bid

Law360, New York (June 22, 2011, 2:51 PM EDT) -- A New York federal judge on Wednesday denied billionaire Carl Icahn's request to sanction a Blockbuster Inc. bondholder for filing an allegedly baseless suit accusing him of misdeeds in the company's bankruptcy, but warned the creditor against raising those claims again.

U.S. Bankruptcy Judge Burton R. Lifland declined to assess formal penalties against the litigant, Lyme Regis Partners LLC, but said the bondholder's pursuit of the case had been “questionable.”

“Although coming close, the Icahn entities have not made the required showing” for sanctions, Judge Lifland...
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