Content area
Full Text
Objections to Video Update's proposed reorganization may derail the chain's hopes of a fast-track emergence from Chapter 11 next month.
An Update franchisee wants more details on how Movie Gallery, which has no franchises, will run Update's franchises when it takes over. Also, a senior creditor in the Update bankruptcy says it isn't receiving enough compensation for its investment.
St. Paul, Minn.-based Video Update had hoped to emerge from bankruptcy in late October as a wholly owned subsidiary of the nation's No. 3
See VIDEO UPDATE Page 9
rental chain, Movie Gallery, based in Dothan, Ala., according to a disclosure statement filed July 31.
A Delaware U.S. Bankruptcy Court hearing to address objections scheduled for Sept. 11 was pushed back to Sept. 24 following the terrorist attacks. "We don't see any more delays" beyond the two-- week setback, insists Michael Lastowski, of the Wilmington, Dela., firm Duane, Morris & Heckscher, one of Video Update's attorneys.
But two parties objecting to the plan could extend the process.
One is a Video Update franchisee with 14 stores...