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April 6, 2011 1:34 PM

Linklaters Helps DISH Win Auction for Blockbuster

Posted by Brian Baxter

UPDATE: 4/7/11, 1:45 p.m. A bankruptcy judge in Manhattan has approved DISH Network's acquisition of Blockbuster, according to The New York Times.

A bankruptcy auction for movie rental chain Blockbuster ended in the early morning Wednesday with a winning bid of $320 million by satellite broadcaster DISH Network.

Linklaters corporate partner Daniel Dufner, Jr., led a team from the Magic Circle firm advising DISH that includes bankruptcy partner Martin Flics, litigation partner Paul Hessler, antitrust partner Jeffrey Schmidt, and associates Colin Greenspon, Michael Deyong, and Edward Rasp III.

Dufner, who was not immediately available for comment, joined Linklaters in May 2009 from White & Case. He has represented DISH on several deals in the past, including parent company EchoStar's spin-off from DISH in January 2008. (R. Stanton Dodge serves as general counsel of EchoStar and DISH, the nation's second-largest satellite broadcaster after DirecTV.)

DISH beat out several suitors for Blockbuster, which filed for bankruptcy in Manhattan last September after several years of seeing revenues fall due to increased competition from rival retailers like Amazon and rental chains like Netflix. Weil, Gotshal & Manges restructuring partners Martin Sosland and Stephen Karotkin are leading a team from the firm advising Dallas-based Blockbuster in its bankruptcy case and on its sale to DISH.

Last month U.S. bankruptcy judge Burton Lifland approved an eleventh-hour deal that prevented an immediate liquidation of Blockbuster and smoothed the way for an auction of the company, as previously reported by The Am Law Daily.

A stalking horse bid from a group of lenders including Cobalt Video and Monarch Alternative Capital was advised by Milbank, Tweed, Hadley & McCloy financial restructuring partners Mark Shinderman and M&A partner Thomas Janson. The group's $308.1 million bid took the early lead in auction proceedings that began Tuesday morning in bankruptcy court but was later surpassed by other offers, according to The New York Times.

Blockbuster's other bidders included South Korea's SK Telecom. Advised by Gibson, Dunn & Crutcher restructuring cochair David Feldman, the largest wireless communications provider in South Korea submitted a $284.5 million offer but later bowed out of the bidding, Bloomberg reports.

Another serious contender for Blockbuster was activist investor Carl Icahn and his Icahn Acquisition group, represented by Cadwalader, Wickersham & Taft financial restructuring cochair John Rapisardi. Icahn, a longtime and outspoken investor in Blockbuster, teamed up with liquidators Great American Group, Tiger Capital, Hudson Capital Partners, and SB Capital Group for a $310.6 million offer for the company.

The auction proceedings continued through the night at Cadwalader's offices in downtown Manhattan, but DISH eventually prevailed a little after 3 a.m., according to Bloomberg. Cadwalader's Rapisardi did not respond to a request for comment.

Last month DISH turned to a team of lawyers from Skadden, Arps, Slate, Meagher & Flom for its $1.4 billion acquisition of bankrupt satellite communications company DBSD North America. (Skadden banking and finance partner Peter Neckles is advising the Wilmington Trust in Blockbuster's bankruptcy case.)

DISH, which has yet to outline its strategy for Blockbuster, will pay about $228 million in cash in order to take over the company in a deal expected to close in the second quarter of 2011. A hearing on DISH's winning bid for the debtor is taking place today in bankruptcy court in Manhattan.

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