New York City U.S. Bankruptcy Judge Burton Lifland in New York approved a loan on Wednesday that will allow Blockbuster to pay film studios’ claims and take an amended $125 million loan to fund operations in bankruptcy.
According to a Bloomberg report, the court approved the loan after it was changed to meet objections from creditors and landlords. New terms require Blockbuster to have a business plan approved by secured lenders on Nov. 30, the same day a description of the company’s reorganization terms is due.
In addition, pre-bankruptcy lenders won’t get potential proceeds from certain lawsuits, and the amount of pre-bankruptcy debt that lenders can roll into the new loan was cut to $125 million from $250 million.
The court also approved paying movie studios amounts owed before Blockbuster filed for bankruptcy. In court papers, Blockbuster estimated it owed $68.5 million to studios that were secured lenders and $49.6 million to others.