Seth Gilbert, 03-3-2009
Tuesday was a bad day for Blockbuster shareholders. Open to close, the company’s stock crashed 77%, dropping from 96 cents to 22 cents a share. The massive sell-off was triggered after reports circulated saying the company hired Chicago law firm Kirkland & Ellis to explore a possible bankruptcy filing.
In rebuttal, Blockbuster told a different tale about its intentions for the retainer. The company says it hired counsel to help with restructuring and not to prepare for court protection.
Did the reports get it wrong? Or did traders rush to action too fast, misinterpreting the news along the way?
Karen Raskopf, Blockbuster’s spokeswoman, said the company hired Kirkland & Ellis “for assistance with our ongoing finance and capital-raising initiative." Regarding Blockbuster’s plans, she said, “We do not intend to file for bankruptcy."
Blockbuster’s “ongoing financing” issues aren’t anything new. Click to Read More
Seth Gilbert, 03-2-2009
The Gibson Les Paul is an icon. Bob Marley was entombed in a mausoleum with his. Duane Allman used one. Slash, the Edge, Mick Jones, Jimmy Page, Keith Richards, Neil Young, Paul McCartney – some of the biggest names in Rock have played it. It’s no surprise, given that, that Activision licensed the guitar’s likeness (and Gibson’s brand) to give game players an axe to shred for the Guitar Hero game franchise. What was a surprise was that Gibson turned on its partner of three years with patent infringement claim last year.
Showing teeth that seemed to come out of nowhere, Gibson said Activision’s Guitar Hero franchise, and eventually, all things guitar-gaming (Gibson also sued EA, MTV Networks, Harmonix and major retailers selling Guitar Hero or Rock Band games), infringed on its prior invention.
From the start, Gibson’s claims looked weak.
Click to Read More
Seth Gilbert,
Monday, several stories seizing on a blog post from Gawker Media’s Kotaku suggested struggling Midway Games might be in the process of selling off its Mortal Kombat game franchise. Several of the articles (on the basis of part of the story, as well) also went so far as to attack the company for pursuing a key-personnel incentive plan at the same time the bankrupt company appears to be cutting back payouts to laid off staff.
The stories’ paint a grim picture of the company’s practices and it’s easy to jump in the chorus of castigation. Unfortunately, headlines sometimes oversell their news story and news stories sometimes under emphasize all of the facts. Here, however questionable some of what’s happening at Midway may (or may not ) be, review of the company’s bankruptcy filings, which are embedded or linked to below, shows the situation is more complicated and far less definitive than many of the reports suggested.
First and most importantly, contrary to suggestion, the Incentive Plan (which provides for $3,775,000 to be set aside to pay incentives to up to 29 employees on the completion of three milestones) is not active. While endorsed by the company, it has not been approved and set in place. Money hasn’t been “set aside.” Midway provided the Bankruptcy Court with a copy of the plan as a proposal on February 23rd (see embedded file below) and requested creditors voice their objections (if any) by March 3rd. A hearing was tentatively scheduled for March 10th. At this point, there’s no guarantee creditors will agree to the plan as written (or at all), or that the Bankruptcy Court will approve its implementation.
Click to Read More
