CMS Cameron McKenna has been instructed to advise the administrators of DVD and video rental chain Blockbuster’s UK arm, which today became the fourth British high-street casualty in two months and the second in a week.
The firm has become the latest to win an advisory role in the recent string of cases that has seen Comet, Jessops and HMV all call in the administrators.
CMS restructuring partner Rita Lowe is leading a team acting for Deloitte partners Lee Manning, Matthew Smith and Neville Kahn, who were appointed as Blockbuster UK’s administrators today (16 January).
Others in the CMS team are restructuring partner Ashley Smith and real estate partner Pranai Karia.
Linklaters is advising Blockbuster’s US-based parent company, Blockbuster LLC, and Dish Network, which bought the company in 2011. The firm’s team is led by New York corporate partner Dan Dufner.
It follows Linklaters’ mandate for the administrators of HMV, which also brought in a Deloitte team this week (15 January 2013). Jessops’ administration earlier this month gave advisory roles to Ashurst and SNR Denton (9 January 2013), while Bingham McCutchen and Mayer Brown were among five firms advising on the Comet case (19 December 2012). Morrison & Foerster is advising a group of HMV’s supplier creditors (16 January 2012).
The Comet, HMV and Blockbuster administrations have all given roles to Deloitte, with partner Neville Kahn acting on all three. The Jessops case is being handled by a PricewaterhouseCoopers team.
Blockbuster UK, headquartered in Uxbridge, has 528 stores across the UK and employs 4,190 staff.
Manning said in a statement: “In recent years Blockbuster has faced increased competition from internet-based providers along with the shift to digital streaming of movies and games. We are working closely with suppliers and employees to ensure the business has the best possible platform to secure a sale, preserve jobs and generate as much value as possible for all creditors.”
He said the company would continue to trade in both retail and rental while it seeks a buyer for all or parts of the business.
He also confirmed that gift cards and credit acquired through the retailer’s ‘trade-in’ scheme would be remain usable, unlike with Jessops and HMV, which both stopped honouring vouchers after entering administration.
Background to this deal:
CMS’s previous encounters with Blockbuster have been through former senior partner and corporate specialist Richard Price. Price advised Blockbuster UK on its £74m sale of video games business Games Station to Game Group, which was advised on the 2007 deal by Clifford Chance corporate partner Lee Coney.
The administration only applies to Blockbuster’s UK business. The global company is headquarted in Colorado and in 2011 was bought out of bankruptcy by Dish for $320m after filing for chapter 11 in 2010. A Weil Gotshal & Manges team including New York restructuring partner Stephen Karotkin acted for Blockbuster, while Linklaters’ Dufner led for Dish.
CMS was appointed last May to advise the administrators of the UK LLP of US law firm Dewey & LeBoeuf, with Lowe leading (16 May 2012).