Bloomberg News

Blockbuster, Canadian Unit Seek Mediation on Trademark

June 23, 2011

(Updates with law on foreign bankruptcy in second paragraph.)

June 23 (Bloomberg) -- Blockbuster Inc. and its Canadian unit will seek mediation to resolve issues such as whether the company in Canada can use the retailer’s trademark, which is claimed by Dish Network Corp., the buyer of Blockbuster Inc.’s U.S. assets.

Lawyers for Blockbuster said today at a hearing in Manhattan that the mediator also would hear the Canadian company’s request for protection from U.S. creditors. Under Chapter 15 of the U.S. Bankruptcy Code, foreign companies can block lawsuits by U.S. creditors while they reorganize in another court.

U.S. Bankruptcy Judge Burton Lifland adjourned the hearing until July 14. The announcement of the mediator was made after almost two hours of private talks among the lawyers and the judge. Lifland said there were “attempts to resolve the issues” during the talks in chambers.

Blockbuster Inc., once the largest video-rental chain, won U.S. Bankruptcy Court approval in April to sell its assets to Dish for $320 million. Dish, based in Englewood, Colorado, is the second-largest U.S. satellite-television provider after DirecTV.

Dish’s threat to end Blockbuster Canada’s use of the Blockbuster logo is part of a strategy to acquire the Canadian unit’s assets, Blockbuster Canada said in court papers June 6.

Blockbuster Canada isn’t part of the U.S. case. It sought Chapter 15 protection in Manhattan on May 20.

The case is In re Blockbuster, 10-14997, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

--Editors: Stephen Farr, Charles Carter

To contact the reporter on this story: Don Jeffrey in New York at djeffrey1@bloomberg.net; Tiffany Kary in New York at tkary@bloomberg.net

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net.


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