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Blockbuster wins court approval to draw from bankruptcy loan

New York City Blockbuster, which filed for bankruptcy Thursday, won court permission to draw $20 million of a $125 million loan that will let it operate while it reorganizes to emphasize online rentals.

The court approved the loan Thursday afternoon at a hearing in Manhattan. Blockbuster said it will only spend $10 million before Sept. 27. In its Chapter 11 filing, the company said that it had agreed with a group of bondholders on a plan of reorganization and secured the loan to finance operations in the meantime.

In a Bloomberg report, Blockbuster CEO James Keyes said the chain has not made any decisions about store closings, which will be “a consideration” during the bankruptcy case.

“We’ll literally be evaluating every single store,” he said. Keyes also said in the report he hopes the company will emerge from bankruptcy in the first quarter.