(Bloomberg) -- Blockbuster Inc., the bankrupt movie-rental company, is the target of a possible buyout by creditors including billionaire Carl Icahn and Monarch Capital Master Partners LP for less than $300 million, a person familiar with the matter said.
Icahn and Monarch are Blockbuster creditors who helped to finance the bankruptcy, making them potential candidates to buy the company, said the person, who declined to be identified because the discussions are private.
Blockbuster, based in Dallas, filed for bankruptcy with the outline of a reorganization plan supported by senior bondholders. Its deadline for filing a plan and disclosure statement has been extended several times.
“It’s hard to say this debtor is anything but insolvent,” U.S. Bankruptcy Judge Burton Lifland said last month.
Icahn didn’t immediately respond to a call seeking comment after regular business hours.
The company was founded in 1985, and grew to serve almost 47 million customers daily in the U.S. and 16 other countries. Viacom Inc., which owns the Paramount film studio, bought Blockbuster from Wayne Huizenga for $8.4 billion in 1994, then spun it off to shareholders in 2004.
The 74-year-old Icahn led a proxy fight in 2005 that put him on the video-rental chain’s board. He resigned as director in January and in March sold most of his 16.9 percent common- share stake, according to a regulatory filing. He later bought about a third of the company’s senior bonds, according to the person familiar with the matter.
The case is In re Blockbuster, 10-14997, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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