Summit Entertainment Having Problems With Blockbuster Video

According to Home Media Magazine, Summit Entertainment is having a problem getting paid from Blockbuster video ( the company has filed for Bankruptcy protection) over Eclipse, Hurt Locker, and Red DVDs.

“Specifically, Summit last November shipped Blockbuster 426,180 DVDs (excluding widescreen) of Eclipse for unit prices ranging from $6 to $20.20 each, in addition to 92,290 copies of the film on Blu-ray Disc (excluding widescreen) for unit prices from $6 to $23.99 each.

Summit, which claims Eclipse was the fourth-biggest home video release of 2010, contends Blockbuster has generated $8.3 million in rental revenue from the shipments.

The studio also has outstanding invoices for 1,710 copies of The Hurt Locker on Blu-ray for $23.99 each, and 1,620 copies of Robin Hood Unrated Blu-ray/DVD combo for $24.99 each.

Separately, Summit last month shipped Blockbuster 294,990 DVD copies (including special editions) of Red at prices of from $6 to $18 each, and 66,480 Blu-ray copies of Red at prices of from $6 to $23.99 each.

In the complaint, Summit said it is “a relatively small company, not one of the ‘Big Six’ media conglomerate ‘major’ movie studios” that it says can more easily accommodate delayed payments.

“It will be a significant hardship for Summit if this receivable is not paid,” read the complaint.”

See the whole story here.

EDITED :Reuters is also now commenting on the story.

“Blockbuster representatives spoke with Summit’s management on a January 28 conference call about unpaid bills for DVDs including the “The Twilight Saga: Eclipse,” which was Summit’s second-most popular DVD and No. 4 among all studios last year.

“To Summit’s surprise and dismay, the debtors informed Summit that the debtors would not pay Summit with respect to products that were shipped post-petition (after the bankruptcy filing) because the debtors lacked the funds to do so,” said a court document.

Summit’s president, Stephen Nickerson, said in a court document that Blockbuster will take in $8.3 million alone from the “Eclipse” DVD and he called the unpaid bills a “significant hardship” for the small studio.

Blockbuster filed for bankruptcy in September, weighed down by its debts and stung by video-on-demand and competitors such as mail-order pioneer Netflix Inc and Redbox Inc, a Coinstar Inc unit that rents movies through kiosks.”

It would appear that Blockbuster obtained the discs well after it filed for protection, at least 3 months. So a question for all you lawyers out there, how does that affect Summit? Did Blockbuster make a deal in bad faith, or is this standard Bankruptcy procedure that Summit should have understood?

Comments

  1. Well Unfortunately for Summit, once a company files bankruptcy protection they are no longer legally required to pay the full amount of the outstanding invoice, in fact it’s illegal for them to pay different amounts to different companies. All Summit can hope is that Blockbuster decides to pay out a high percentage of their bills.

  2. Like squeezing blood from a turnip.

  3. Once a bankruptcy filing has taken place, in general, payments made to creditors are determined by the court, not the company. Summit should have been aware of this. Surely they knew they were shipping products to a company in bankruptcy protection. How they could have reasonably expected payment, in full or in part, immediately or delayed, is beyond me.

  4. Natalie Angers says:

    I would think that Blockbuster should have informed Summit and other studios about filing for bankruptcy before studios shipped all their products

    • It’s known. A press release is required as well as other documents. Again it seems someone at Summit fell asleep on the job.

  5. Maybe this question is out of line, but WHY is Blockbuster accepting goods for their own usage with no intent on honoring the payment to the originator of those goods. If Blockbuster had NO intention of paying Summit what was due for the retail & rental stock, then Blockbuster should NEVER have accepted the items & should have shipped them back to Summit immediately.

    Receipt of the items and the subsequent sale / rental of those items SHOULD be paid back to Summit, whether they are in bankruptcy or not. Otherwise, essentially they stole the DVDs.

    I don’t use Blockbuster often, but this solidifies that it will be the LAST time I give them a dime of my money.

    • Because Blockbuster is trying to get out of bankruptcy or it’s in their Chapter 11 agreement. Who knows it is within their rights to accept goods GIVEN to them I believe it’s been a few years since I learned about bankruptcy laws. In other words since this bankruptcy has been public since summer or thereabouts and on top of that its was known Blockbuster was close to filing for year or two Summit should have been to ones to stop the shipment BEFORE it took place. It’s their decision. Like Elizabella stated Summit can only hope like Larry Richman stated THE COURTS will agree to payment if not Summit may have to take the lost.

  6. Elizabella is right. Is it just me or does it seems like Summit is lawsuit happy? So many too many have been public. It makes them look terrible well it gives a true showing. I mean it only came they are looking to refinance/get more funds to make movies despite Twilight saga success which isn’t really as successful as HP, POTC, LOR or even Star War sorry I am a Twihard but it’s the truth. Anyways with this funding issue out in public and their lawsuits out and known it seems to mean Summit is getting hit hard by the economy but then again as a friend reminds me “Summit are gold-diggers” they did fast track the saga and screwed up continuity making the films a huge joke in the world of film lovers and critics. They need money they need it now and in way possible. Hurt Locker they bought the rights to after the film was already made and made runs a few film festivals. Yes it won awards but was it well deserved is in question because of that email sent out to voters. I personally disliked Hurt Locker for many reasons. My military family and friend found it offensive.

  7. Blockbuster was initially screwed by Viacom who left them with a massive amount of debt, in the billions. Blockbuster was supposed to make a $40 million interest payment every month. Blockbuster filed for restructuring bankruptcy in the hopes of keeping from closing all together. They are closing non-profitable stores (like the store my own mother works at) and are working to stay in business. The bankruptcy judge is deciding who gets money and who doesn’t, not Blockbuster.

    The majority of the movie studios (i.e. NOT SUMMITT) are working with Blockbuster because they are the last brick and mortar venue for their movies. Summitt, who is asking for $8.3 million for Eclipse??? Really? Seriously? Summitt grossed over $300 million for Eclipse which had an estimated $65 million budget. That leaves over $200 million as profits for Summitt. They are being money hungry whores and need to quit crying like babies. They may be a ‘small’ studio, but they have made more than enough off of the Twilight hype. Hell, they are so greedy, they almost lost Ashley and Kellan over a total of $2 million.

    Summitt – Stop being a greedy studio, embrace the other companies that actually assist you, love your actors, and learn that sometimes you have to pay a little bit more to play.

  8. blockbuster has been on the verge of collapse itself. It might not have paid simply because it might not have the money. If it goes into Bankruptcy, everyone loses, Summit will lose (only getting a fraction of what it is owed), employees lose their jobs, the public loses a place to rent movies legally, government lose out on taxes…..

  9. Nomo Blockbuster says:

    This is awesome! The little guy, Summit, has got Blockbuster by the cajones and if Blockbuster doesn’t pay, Summit will likely withhold ‘Breaking Dawn’ from Blockbuster altogether and Blockbuster will most definitely be done for.

  10. anything after the bankruptcy filing is totally collectable.. blockbuster either has to pay or be forced into liquidation.

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