BLOKB Shares Getting Tight Before the October 19th Court Day

Blockbuster Seeks To Limit Trading To Preserve Tax Benefits
Friday 09/24/2010 2:18 PM ET - Dow Jones News

Related Companies
Symbol Last %Chg
BLOKA 0.0502 16.74%
BLOKB 0.025 19.05%

As of 4:00 PM ET 9/24/10

By Joseph Checkler
Of DOW JONES DAILY BANKRUPTCY REVIEW

NEW YORK (Dow Jones)--Blockbuster Inc. (BLOKA, BLOKB) is trying to limit trading of its stock during its bankruptcy to preserve valuable tax breaks.
In a filing with the U.S. Bankruptcy Court in Manhattan, Blockbuster asked a judge to impose a 20-day waiting period prior to any sale or purchase made by investors owning or seeking to own 4.75% or more of the company's preferred or common shares.
Blockbuster wants the right to object to such transactions so that it can preserve tax breaks stemming from an estimated $580 million in net operating losses.
Judge Burton Lifland of U.S. Bankruptcy Court in Manhattan approved the request on an interim basis, which will make the large investors follow those rules before a final hearing on the matter set for Oct. 19.
Significant ownership changes in Blockbuster's stock could hinder the company's ability to apply those losses against taxes in future years. Blockbuster also wants all holders of 4.75% or more of those classes to identify themselves, and it wants to stop any holder of the company's Series A convertible shares from converting them into Series A common stock.
The video retailer, which filed for Chapter 11 bankruptcy protection on Thursday with plans to slash its debt to around $100 million from nearly $1 billion, asked Lifland to accept its request on an interim basis so share owners couldn't sell out their stakes awaiting a ruling.
"Such trading would put the Debtors' Tax Attributes in jeopardy and would thereby be counterproductive to the Debtors' objectives in seeking the relief requested herein," Blockbuster said in the filing.
"The Tax Attributes are valuable assets of the Debtors' estates," Blockbuster said in its filing, because the federal tax code allows a corporation to carry over losses and tax credits to offset future income, thus reducing its tax burden.
Blockbuster's shares recently traded at less than 5 cents a share on the over-the-counter Pink Sheets.

(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection.)

-By Joseph Checkler, Dow Jones Daily Bankruptcy Review; 212-416-2152; joseph.checkler@dowjones.com

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/nae/al?rnd=6uN7NCETTjhKngHQfUrJmg%3D%3D. You can use this link on the day this article is published and the following day.

Dead Cat Bounce

Our Dead Cat Bounce call yesterday at .0206 on BLOKB is looking good up to .023 up over 20% since our call with lots more to come as we expect a nice bounce back to .06 short term

Spartan Stocks 300 Weekly Picks

Why Spartan Stocks? Because we are an elite private group of investors utilizing the most advanced stock scanning systems picking out only the best stock picks. Spartan Stocks is not a paid promoter of any kind. Welcome to Sparta.

Come to Sparta

Spartan Stocks worked hard last week to find some of the best picks for our members and followers. Thank you everyone who has tweeted, emailed and DM’d us with your gains. We always welcome your feedback, good and bad, and are pleased with our end results.

Featured Pick Date called End Results Profit

EVXA Called on 9/20 at .0003 High of .0006 100% Gain
FGOCQ Called on 9/20 at .0015 High of .0045 200% Gain
EXPH Called on 9/20 at .0007 Currently at .0010 43% Gain
CNEX Called on 9/21 at .0006 Currently at .0013 116% Gain
UNCLQ Called on 9/21 at .0015 High of .0048 300% Gain
QASP Called on 9/20/10 at .0012 High of .0024 100% Gain

**Current price was based on time of printing**

Because you asked for it, we will give it to you……. Coming soon, Spartan Stocks will debut it’s new website, currently under construction. We are pleased to continue providing what we think are the best stocks each week, and look forward to hearing from everyone soon.
Spartan