If anyone ever doubted the vast number of moving pieces a multi-million dollar buyout contained, they need only to look at Dish Network's recent acquisition of Blockbuster.
In May Dish was sued by NCR, the company that runs the former rental leader's line of movie kiosks, Blockbuster Express. Now the new Blockbuster owner is embroiled in a legal struggle with Grant Thornton Ltd., which took over the operation of Blockbuster's Canadian stores following the company's bankruptcy. Dish is asking the company to cease using the Blockbuster name - something Grant Thornton Ltd. takes some issue with.
The legal disconnect between Blockbuster's U.S. and Canadian branches represents an attempt by Dish to snatch up the latter's assets, says a report by Bloomberg. After all, the Canadian business was not part of Dish's acquisition.
"By seeking to threaten Blockbuster Canada with the loss of its continued use of the Blockbuster trademarks in the Canadian business, Dish engaged in a stratagem to improve its position in its ongoing negotiations over the terms of acquiring the Block-buster Canada business and assets," said lawyers representing Grant Thornton Ltd. according to the site.
Last month Grant Thornton Ltd. was granted legal receivership of Blockbuster Canada by a Canadian court, essentially turning over the operation in full to the company. The move came weeks after Dish's $320 million bid for Blockbuster. Soon after, the company announced it would shutter almost 150 Blockbuster locations in Canada by June 18th.
Despite the cutback on brick-and-mortar stores as more and more flock to mail-based rental services and online streaming, Grant Thornton believes the Blockbuster name is still vital. Losing it, their lawyers argue, would "irreparably harm" the already troubled operation.
"Outright termination of all of Blockbuster Canada's rights under the agreements, including Blockbuster Canada's right to use the Blockbuster trademarks and other intellectual property, would be devastating to Blockbuster Canada's...business and the value of its assets," said a Grant Thornton lawyer.
Blockbuster Canada, unlike its U.S. counterpart, only filed for bankruptcy protection this year. The company still owes around $67 million to studios.
