Howard Kennedy wins role as Blockbuster UK finds buyer

CMS, White & Case and HowardKennedyFsi have all won advisory roles on a deal that will see British high street casualty Blockbuster sell its UK shops to restructuring firm Gordon Brothers Europe.

Paul Glassberg
Paul Glassberg

The takeover is being overseen by Blockbuster UK administrators Deloitte, which turned to CMS for advice after the entertainment chain went into administration earlier this year (16 January 2013).

CMS banking and finance partner Peter Wiltshire led on this transaction, while restructuring partner Rita Lowe has been advising a team acting for Deloitte partners Lee Manning, Matthew Smith and Neville Kahn on the administration, which only applies to Blockbuster’s UK business.

Meanwhile, HowardKennedyFsi advised existing client Gordon Brothers Europe on all aspects of the deal. Corporate partner Paul Glassberg led a team together with intellectual property chief Robert Lands, head of restructuring Vernon Dennis, disputes partner Amanda McNeil, real estate partner Adam Walford, transaction finance partner Nigel Emerson and tax specialist Brian Slater.

White & Case is understood to have acted for Blockbuster’s US-based parent company, Blockbuster LLC, on this transaction. Former Linklaters New York partner Dan Dufner, who joined White & Case this year, has been advising the parent company and its owner, Dish Network, on the administration.

The sale is expected to save thousands of job at Blockbuster UK, which is headquartered in Uxbridge and has 528 stores and 4,190 staff across the UK.

The Comet, HMV and Blockbuster administrations have all given roles to Deloitte, with partner Neville Kahn acting on all three.

Background to this deal:

CMS’s previous encounters with Blockbuster were 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. Earlier this year real estate partners at CMS advised as supermarket group Morrisons’ acquired 49 Blockbuster stores from Deloitte.

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 protection in 2010. A Weil Gotshal & Manges team including New York restructuring partner Stephen Karotkin acted for Blockbuster, while Linklaters’ Dufner led for Dish.

Gordon Brothers Europe is understood to be a longstanding client of HowardKennedyFsi.