20th Century Fox Adequate Protection Motion by RandyReese1

VIEWS: 97 PAGES: 16

									                                                                                Docket #0944 Date Filed: 2/18/2011




ALSTON & BIRD LLP
Louis A. Karasik (Pro Hac Vice Pending)
Leib M. Lerner (Pro Hac Vice Pending)
333 South Hope Street, 16th Floor
Los Angeles, CA 90071
Telephone: (213) 576-1000
Facsimile: (213) 576-1100
Email: Lou.Karasik@alston.com
Email: Leib.Lerner@alston.com
-and-
Martin G. Bunin
John W. Spears
90 Park Avenue
New York, NY 10016-1387
Telephone: (212) 210-9400
Facsimile: (212) 210-9444
Email: John.Spears@alston.com
Email: Marty.Bunin@alston.com

Attorneys for Twentieth Century Fox Home Entertainment LLC

UNITED STATES BANKRUPTCY COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK

In re:                                    )                      Chapter 11
                                          )
                          1
BLOCKBUSTER INC., et al.,                 )                      Case No. 10-14997 (BRL)
                                          )
                  Debtors.                )                      (Jointly Administered)
__________________________________________)

    MOTION OF TWENTIETH CENTURY FOX HOME ENTERTAINMENT LLC FOR
       ADEQUATE PROTECTION PURSUANT TO 11 U.S.C. §§ 361 AND 363(e)

         Twentieth Century Fox Home Entertainment LLC (“Fox”), a creditor in this bankruptcy

case, hereby moves this Court pursuant to Sections 361 and 363(e) of Title 11 of the United


1
  The Debtors, together with the last four digits of each Debtor’s federal tax identification number, are
Blockbuster Inc. (5102); Blockbuster Canada Inc. (1269); Blockbuster Digital Technologies Inc. (9222);
Blockbuster Distribution, Inc. (0610); Blockbuster Gift Card, Inc. (1855); Blockbuster Global Services
Inc. (3019); Blockbuster International Spain Inc. (7615); Blockbuster Investments LLC (6313);
Blockbuster Procurement LP (2546); Blockbuster Video Italy, Inc (5068); Movielink, LLC (5575);
Trading Zone Inc. (8588); and B2 LLC (5219).


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                                                                         1014997110218000000000008
States Code (the “Bankruptcy Code”) for adequate protection of its personal property that is

subject to an unexpired lease, as set forth below.

                                      PRELIMINARY STATEMENT

        1.      This motion is brought by Fox to obtain adequate protection for the steeply

declining value of DVDs of Fox’s movie titles leased to Blockbuster, Inc. (the “Debtor”). The

DVDs of the movie titles are leased to Blockbuster under the parties’ Revenue Sharing

Agreement dated as of August 28, 2005 (as amended, the “RSA”), a true and correct copy of

which is attached as Exhibit 1 to the Confidential Exhibits in Support of Motion of Motion of

Twentieth Century Fox Home Entertainment LLC for Adequate Protection Pursuant to 11 U.S.C.

§§ 361 and 363(e) (the “Fox Exhibits”).2 Pursuant to the RSA, Fox leases DVDs of Fox titles to

Blockbuster, which in turn rents those leased DVDs to consumers and sells some of the used

ones as authorized. Fox and Blockbuster share the revenue generated by consumer rentals and

sales during each title’s lease period. Because of the nature of the industry and the rental

properties at issue, Fox’s property becomes significantly less valuable over the duration of each

title’s lease period. A substantially greater portion of revenue is generated by the leased DVDs

closer to the “street date” when a title is first made available to the public. As discussed more

fully below and in the supporting affidavits of Dan Mackechnie and Don Jeffries, the value of a

given DVD title declines from its street date and each week thereafter. Blockbuster admits that it

may not have enough money to pay what is due to Fox under the RSA. The leased DVD titles

will generate more than $7 million over the next several months, and Fox seeks an order from

this court for adequate protection of its property, including a requirement that Blockbuster
2
  The Fox Exhibits as well as the Declaration of Dan Mackechnie (the “Mackechnie Declaration”) and
Declaration of Don Jeffries (the “Jeffries Declaration”) are the subject of Fox’s motion to file under seal
and contain specific, confidential commercial information regarding the terms and conditions of the RSA,
the parties’ business practices and the method used by Fox to calculate its expected revenue share.


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sequester monies generated by the rental and sales of Fox’s leased DVDs in order to pay Fox its

share of the revenue.


                                          JURISDICTION

        2.      This Court has jurisdiction to consider this matter pursuant to 28 U.S.C. § 157 and

28 U.S.C. § 1334. This is a core proceeding pursuant to 28 U.S.C. § 157(b). Venue is proper

before this Court pursuant to 28 U.S.C. § 1408 and 1409. The statutory relief sought in this

matter is predicated upon Sections 361 and 363(e) of the Bankruptcy Code.


                                          BACKGROUND

        3.      On September 23, 2010 (the “Petition Date”), each of the Debtors filed petitions

for bankruptcy under Chapter 11 of the Bankruptcy Code. The Debtors are authorized to operate

their business and manage their properties as debtors in possession pursuant to Sections 1107(a)

and 1108 of the Bankruptcy Code.


        4.      Contemporaneously with their filing, the Debtors also filed Debtor’s Motion

Pursuant to 11 U.S.C. §§ 105, 363(B)(1), and 503(B) and Fed. R. Bankr. P. 6003 and 6004

Requesting (I) Authority to Pay Certain Prepetition Claims of Movie Studios and Game

Providers and (II) Administrative Expense Priority Status for all Undisputed Obligations Arising

Postpetition [Docket No. 15] (the “Studios Payment Motion”).3                 That motion requested

(i) authority to pay the undisputed outstanding prepetition obligations owed to (a) the Secured

Studios, in accordance with the Canadian Lien Agreement, and (b) those certain Unsecured

Studios with which Blockbuster, may, in its sole discretion, enter into on a postpetition basis an

Accommodation Agreement. Fox is one of the Secured Studios as defined in that motion.

3
 Capitalized terms in this paragraph shall have the meaning ascribed to them in the Studios Motion
unless otherwise defined herein.


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        5.     On November 3, 2010, this Court entered its Amended Final Order Pursuant to

11 U.S.C. §§ 105, 363(B)(1), and 503(B) and Fed. R. Bankr. P. 6003 and 6004 Requesting

(I) Authority to Pay Certain Prepetition Claims of Movie Studios and Game Providers and

(II) Administrative Expense Priority Status for all Undisputed Obligations Arising Postpetition

[Docket No. 470] (the “Studios Payment Order”). The Debtors’ undisputed obligations to any

Secured Studio or Participating Unsecured Studio that arise from the postpetition delivery of

materials, goods, and services that were ordered in the prepetition period shall have

administrative expense priority status pursuant to section 503(b) of the Bankruptcy Code. (See

Studios Payment Order ¶ 11.) In addition, materials, goods and services ordered postpetition are

allowed administrative expenses as actual, necessary costs and expenses of preserving the

Debtors’s estates. See 11 U.S.C. § 503(b).


        6.     Until late January 2011, pursuant to the RSA and the Studios Payment Order, Fox

and Blockbuster continued their business relationship unchanged, with Fox leasing DVDs to

Blockbuster, and Blockbuster renting those DVDs to consumers and paying to Fox the share of

revenue to which Fox is entitled.


        7.     In late January 2011, Blockbuster informed Fox that, as purportedly instructed by

its DIP lenders, Blockbuster would not be turning over almost $24 million in revenue due or

coming due to Fox pursuant to the RSA. All of the amounts due to Fox are administrative

claims. Blockbuster has stated that it intends to stay “payment neutral” on future obligations, but

the representation is illusory, at best, because Blockbuster is constrained in its freedom to use

cash collateral. While Blockbuster has made certain payments to Fox over the past few weeks,

Blockbuster is not paying all of its past and current obligations and there is no assurance that




-   -LEGAL02/32456576v5                         4
Blockbuster will pay the revenue due to Fox for the leased DVDs that Blockbuster continues to

rent to customers under the parties’ lease agreement.


        8.     As detailed in the Mackechnie Declaration, Jeffries Declaration and Fox Exhibits,

all filed under seal, Fox has determined that Fox’s share of the revenue from the leased DVDs

will be more than $7 million over the next several months. Blockbuster’s latest actions indicate

that there is at least a significant risk, if not a complete certainty, that Blockbuster will not turn

over the revenue to Fox.


        9.     There is no question that Fox’s leased DVDs have declining value over each

title’s lease period. Each customer rental is called a “turn.” For each turn, Blockbuster is

obligated to pay Fox a certain amount of the revenue generated by such turn for a set time period

after the “street date” of the DVD title. The greatest amount of revenue is generated in the

weeks closest to the street dates of each DVD title, and steadily diminishes thereafter. The closer

a DVD title is to its street date, the more turns that title will generate, and thus the more revenue

will be generated to Fox through its lease of DVDs of such title to Blockbuster pursuant to the

RSA. DVDs of new titles have declining value over time because turn activity declines over

time. The value of a given DVD of a rental title thus declines beginning from its street date and

each week thereafter, similar to the initial depreciation of a new car after it is driven off the

dealer’s lot, and its subsequent depreciation per each mile driven.


        10.    Fox seeks an order from this court for adequate protection of its property,

including a requirement that Blockbuster sequester monies generated by the rental and sales of

Fox’s leased DVDs and pay Fox its share of the revenue.




-   -LEGAL02/32456576v5                           5
                                     RELIEF REQUESTED4

        11.      Fox seeks adequate protection of its leased property pursuant to Section 363(e) of

the Bankruptcy Code, including an order granting the remedies available to Fox pursuant to

Section 361. Blockbuster should be required to sequester revenue generated by Blockbuster’s

rental and authorized sales of Fox’s leased DVDs during the lease period for each Fox title and

should be ordered to turn over the amounts due to Fox pursuant to the RSA, so that Fox’s interest

in its personal property is adequately protected. Alternatively, Fox should be entitled to a

superpriority lien on those same revenues to be paid ahead of all other creditors upon the

reorganization, sale or liquidation of Blockbuster’s assets. These remedies are necessary so that

Fox will realize the “indubitable equivalent” of its interest in the property, as required by Section

361. If for any reason the Court declines to grant Fox these remedies, Fox at a minimum seeks

an order precluding Blockbuster from continuing to use Fox’s property and requiring that

Blockbuster return the property so that Fox can seek to monetize the titles through distribution to

other vendors.


        12.      The Bankruptcy Code provides that a debtor in possession, after notice and a

hearing, may “use, sell, or lease, other than in the ordinary course of business, property of the

estate.” See 11 U.S.C. §§ 363(b)(1) and (c)(1). The authorization to use property of the estate is

subject to certain expressed limitations, specifically the requirement for adequate protection

contained in Section 363(e) of the Bankruptcy Code:

        Notwithstanding any other provisions of this section, at any time, on request of an
        entity that has an interest in property used, sold, or leased, or property to be used,
        sold, or leased, by the trustee, the court, with or without a hearing, shall prohibit

4
 In accordance with Rule 9013-1(b) of the Local Bankruptcy Rules of the United States Bankruptcy
Court for the Southern District of New York, no separate memorandum of law is required because the
arguments and authorities relied upon in this Motion are set forth herein.


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        or condition such use, sale, or lease as is necessary to provide adequate protection
        of such interest. This subsection also applies to property that is subject to any
        unexpired lease of personal property (to the exclusion of such property being
        subject to an order to grant relief from the stay under section 362).
11 U.S.C. § 363(e) (emphasis supplied).


        13.    The second sentence of Section 363(e) (“This subsection also applies to property

that is subject to any unexpired lease of personal property (to the exclusion of such property

being subject to an order to grant relief from the stay under section 362)”), added to the statute

by the 1994 amendments to the Bankruptcy Code under the Bankruptcy Reform Act of 1994

(see, e.g., In re Ernst Home Center, Inc., 209 B.R. 955, 965 (W.D. Wa. 1997)), gives personal

property lessors the same or equivalent protections accorded real property lessors under Section

365(d)(3). Pursuant to subsection (5), the debtor must commence timely payments due under a

personal property lease to the lessor 60 days after the order for relief is entered in the case. “The

intent of this new subsection was to retain the debtor's breathing period to make an informed

decision about assumption or rejection of personal property leases, while assuring the lessor that

after 60 days it will receive its lease payments without having to demonstrate actual benefit to

the estate. In re Ernst Home Center, Inc., 209 B.R. at 965 (“Section 363(e) makes it clear that

the personal property lessor is entitled to adequate protection.”).


        14.    The Debtors are required to perform the duties of a trustee in this bankruptcy

case. 11 U.S.C. § 1107. As such, Blockbuster “has the burden of proof on the issue of adequate

protection.” 11 U.S.C. § 363(p)(1). Adequate protection is mandatory once requested, provided

that the lessor show that it has an interest in the property, and that the Debtor fails to prove that

the lessor’s property is adequately protected. 11 U.S.C. § 363(e) (the court…shall prohibit or

condition the use, sale or lease as is necessary to provide adequate protection of such interest.”)



-   -LEGAL02/32456576v5                           7
(emphasis supplied). The adequate protection must cover the creditor from the date that the

motion for adequate protection is filed. See, In re Best Products, Inc., 138 B.R. 155, 158 (Bankr.

S.D.N.Y. 1992) (“the motion date controls”).


        15.    Section 361 of the Bankruptcy Code provides illustrative examples of adequate

protection to be ordered to ensure that a lessor receives the benefit of its bargain:

        When adequate protection is required under section 362, 363, or 364 of this title
        of an interest of an entity in property, such adequate protection may be provided
        by--
        (1) requiring the trustee to make a cash payment or periodic cash payments to
        such entity, to the extent that the stay under section 362 of this title, use, sale, or
        lease under section 363 of this title, or any grant of a lien under section 364 of this
        title results in a decrease in the value of such entity’s interest in such property;
        (2) providing to such entity an additional or replacement lien to the extent that
        such stay, use, sale, lease, or grant results in a decrease in the value of such
        entity’s interest in such property; or
        (3) granting such other relief, other than entitling such entity to compensation
        allowable under section 503(b)(1) of this title as an administrative expense, as
        will result in the realization by such entity of the indubitable equivalent of such
        entity’s interest in such property.
11 U.S.C. § 361.

        16.    Notably, the parties’ agreement here is a bona fide lease transaction that meets the

test of a lease set forth in Section 1-201(37) of the N.Y.U.C.C. As detailed in the affidavits filed

concurrently herewith, the plain language of the parties’ RSA provides for a lease relationship,

the DVDs continue to have economic life after the revenue sharing period for each title expires,

the RSA provides substantial limits on how and when Blockbuster may use the leased DVDs,

Blockbuster is not bound to renew the lease for the remaining economic life of the goods or to

become the owner of the goods and Blockbuster has no option during the lease term to renew the

lease for the remaining economic life of the goods or to become the owner for additional or

nominal consideration.


-   -LEGAL02/32456576v5                           8
        17.    Fox is entitled to adequate protection of its leased property pursuant to Section

363(e) of the Bankruptcy Code and to the remedies available pursuant to Section 361.

Blockbuster should be required to sequester revenue generated by Blockbuster’s rental and sale

of Fox’s DVD titles, and ordered to turn over the amounts due to Fox pursuant to the RSA, so

that Fox’s interest in its personal property is adequately protected. Alternatively, (i) Fox should

be entitled to a superpriority lien on those same revenues to be paid ahead of all other creditors

upon the reorganization, sale or liquidation of Blockbuster’s assets. If for any reason the Court

declines to grant Fox these remedies, Fox at a minimum seeks an order precluding Blockbuster

from continuing to use Fox’s property and requiring that Blockbuster return the property so that

Fox can seek to monetize the titles through distribution to other vendors.

                                            NOTICE

        Fox has provided notice of this Motion to (i) the U.S. Trustee; (ii) counsel for the

Debtors; (iii) counsel for the Official Committee of Unsecured Creditors; (iv) the United States

Attorney for the Southern District of New York; and (v) all parties who have requested notice in

these chapter 11 cases.

        WHEREFORE, for all the foregoing reasons, Fox respectfully requests that the Court

enter an order substantially in the form submitted herewith as Exhibit A granting Fox adequate

protection.




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Date: February 18, 2011        ALSTON & BIRD LLP


                           By: /s/ Martin G. Bunin
                               Martin G. Bunin
                               90 Park Avenue
                               New York, New York 10016
                               (212) 210-9400
                               -and-
                               Louis A. Karasik (Pro Hac Vice Pending)
                               Leib M. Lerner (Pro Hac Vice Pending)
                               333 South Hope Street
                               16th Floor
                               Los Angeles, CA 90071-3004
                               (213) 576-1000
                               Counsel for Twentieth Century Fox Home
                               Entertainment LLC




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                     EXHIBIT A




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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
--------------------------------------------------------------x
                                                              :
In re:                                                        :   Chapter 11
                                                              :
                                     1
BLOCKBUSTER INC., et al.,                                     :   Case No. 10-14997 (BRL)
                                                              :
                                            Debtors.          :   (Jointly Administered)
                                                              :
--------------------------------------------------------------x

      ORDER PURSUANT TO 11 U.S.C. §§ 361 AND 363(e) GRANTING ADEQUATE
    PROTECTION TO TWENTIETH CENTURY FOX HOME ENTERTAINMENT LLC
                                                 2
        Upon the Motion (the “Motion”) of Twentieth Century Fox Home Entertainment LLC

(“Fox”) for Adequate Protection Pursuant to 11 U.S.C. §§ 361 and 363(e), dated February __,

2011; and upon consideration of the Motion and the arguments contained therein; and it

appearing that no other further notice is required or necessary; and the Court having heard the

statements, arguments, and representations of counsel and all persons who desired to be heard at

the hearing on the Motion; and after due deliberation,

IT IS HEREBY FOUND AND DETERMINED THAT:

        A.       The Court has jurisdiction to consider the Motion and the relief requested therein

pursuant to 28 U.S.C. § 1334.

        B.       Consideration of the Motion and the requested relief is a core proceeding the

Court can determine pursuant to 28 U.S.C. § 157(b)(2).

        C.       Venue is proper before this Court pursuant to 28 U.S.C. §§ 1408 and 1409.

1
  The Debtors, together with the last four digits of each Debtor’s federal tax identification number, are
Blockbuster Inc. (5102); Blockbuster Canada Inc. (1269); Blockbuster Digital Technologies Inc. (9222);
Blockbuster Distribution, Inc. (0610); Blockbuster Gift Card, Inc. (1855); Blockbuster Global Services
Inc. (3019); Blockbuster International Spain Inc. (7615); Blockbuster Investments LLC (6313);
Blockbuster Procurement LP (2546); Blockbuster Video Italy, Inc (5068); Movielink, LLC (5575);
Trading Zone Inc. (8588); and B2 LLC (5219).
2
  Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Motion.
       D.      As of the Petition Date, Blockbuster, Inc. (“Blockbuster”) was obligated to Fox

under the terms of the Revenue Sharing Agreement, dated as of August 28, 2005, as

subsequently amended (the “RSA”).

       E.      Fox leases DVDs of Fox titles to Blockbuster, which in turn rents those leased

DVDs to consumers and sells some of the used ones as authorized. Fox and Blockbuster share

the revenue generated by consumer rentals and sales during each title’s lease period.

       F.      A substantially greater portion of revenue is generated by the leased DVDs closer

to the “street date” when a title is first made available to the public. The leased DVD titles have

steeply declining value over the term of the lease.

       G.      Pursuant to the Studios Payment Order entered by this Court on November 3,

2010, the Debtors’ undisputed obligations to any “Secured Studio” or “Participating Unsecured

Studio” that arise from the postpetition delivery of materials, goods, and services that were

ordered in the prepetition period shall have administrative expense priority pursuant to section

503(b) of the Bankruptcy Code.

       H.      Until late January 2011, pursuant to the RSA and the Studios Payment Order, Fox

and Blockbuster continued their business relationship unchanged, with Fox leasing DVDs to

Blockbuster, and Blockbuster renting those DVDs to consumers and paying to Fox the share of

revenue to which Fox is entitled.

       I.      In late January 2011, Blockbuster informed Fox that it would not be turning over

almost $24 million in revenue due or coming due to Fox pursuant to the RSA.

       J.      Fox’s share of the revenue from the leased DVDs will likely exceed $7 million

over the next several months. There is significant risk that Blockbuster will not turn over such

revenues to Fox.




                                                 2
       K.     All of the sums that are due or will be coming due to Fox under the RSA are

entitled to payment as administrative expense claims.

       L.     Fox is entitled to adequate protection pursuant to sections 361 and 363(e) of the

Bankruptcy Code.

NOW, THEREFORE, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED THAT

       1.     The Motion is GRANTED.

       2.     Within 10 days of the entry of this Order, Blockbuster shall establish an escrow

account (the “Escrow Account”) with a third-party financial institution acceptable to Fox (the

“Escrow Agent”).

       3.     As adequate protection of Fox’s interests in the personal property leased to

Blockbuster under the RSA, on the first business day following establishment of the Escrow

Account (the “Initial Deposit Date”), Blockbuster shall deposit an amount into the Escrow

Account equal to all sums that became due and owing to Fox under the RSA between and

including the date on which the Motion was filed and the last day of week immediately

preceding the Initial Deposit Date, including without limitation any “Mandatory Destruction

Fees,” “Upfront Fees,” “Minimum Payments,” shares of “Net Rental Revenue” pursuant to

paragraph 7(a) of the RSA, shares of “Net PVU Revenue” pursuant to paragraph 9(d) of the

RSA, “Auto Sale Fees,” and “Missing Unit Fees,” in each case without regard to the provisions

of section 8(a) of the RSA regarding the timing of payments to Fox.

       4.     As further adequate protection of Fox’s interests in the personal property leased to

Blockbuster under the RSA, beginning on the first business day of the first week following the

week in which the Initial Deposit Date occurs, on the first business day of each week,

Blockbuster shall deposit an amount into the Escrow Account equal to all sums that became due




                                               3
and owing to Fox under the RSA during the prior week, including without limitation any

“Mandatory Destruction Fees,” “Upfront Fees,” “Minimum Payments,” shares of “Net Rental

Revenue” pursuant to paragraph 7(a) of the RSA, shares of “Net PVU Revenue” pursuant to

paragraph 9(d) of the RSA, “Auto Sale Fees,” and “Missing Unit Fees,” in each case without

regard to the provisions of section 8(a) of the RSA regarding the timing of payments to Fox.

       5.     As further adequate protection of Fox’s interests in the personal property leased to

Blockbuster under the RSA, Fox shall be entitled to request and receive from the Escrow Agent

an accounting of all sums held in the Escrow Account within one (1) business day of requesting

such an accounting from the Escrow Agent, without the need for Fox to provide any notice

whatsoever to the Debtors or any other party-in-interest (except the Escrow Agent).

       6.     As further adequate protection of Fox’s interests in the personal property leased to

Blockbuster under the RSA, Blockbuster shall perform all of its obligations under the RSA,

except as such obligations have been modified by paragraph 4 of this Order, but including

without limitation the mandatory destruction provisions of paragraph 4 of the RSA, the insurance

provisions of paragraph 3(a) of the RSA, the reporting requirements of paragraph 7(a) and 10 of

the RSA, and the auditing requirements of paragraph 11 of the RSA.

       7.     As further adequate protection of Fox’s interests in the personal property leased to

Blockbuster under the RSA, in the event that Blockbuster does not perform its obligations under

this Order and the RSA (a “Breach”), Fox may submit written notice of such Breach to the

Debtors. In the event that the Debtors do not cure any such Breach within five (5) business days

of receipt of written notice of such Breach from Fox, Fox shall, with no other or further action

required on the part of Fox and without the need for any other or further Order of the Court, be

immediately (a) entitled to request and receive from the Escrow Agent payment of all sums in




                                               4
the Escrow Account; (b) granted an administrative expense claim (the “Breach Claim”) in

amount equal to all sums due and owing to Fox on account of the RSA not fully satisfied by

amounts held in the Escrow Account, which Breach Claim shall be secured by (i) super-priority,

priming liens on all personal property leased to Blockbuster under the RSA, (ii) liens on all other

property of the Debtors’ estates not subject to liens, and (iii) junior liens on all property of the

Debtors’ estate subject to other liens; and (c) be granted immediate relief from the stay imposed

by section 362 of the Bankruptcy Code to permit Fox to pursue its state law rights, and to

otherwise exercise its contractual and legal rights and remedies, with respect to the personal

property leased to Blockbuster under the RSA.

       8.      Nothing contained in this order shall be construed as a limitation or waiver of any

of Fox’s rights under the RSA and/or applicable federal or state law.

       9.      The terms and conditions of this Order shall be immediately effective and

enforceable upon its entry.

       10.     This Court shall retain jurisdiction to hear and determine all matters arising from

the implementation of this Order.


Dated: March ___, 2011
       New York, New York


                                            HONORABLE BURTON R. LIFLAND
                                            UNITED STATES BANKRUPTCY JUDGE




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