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.”
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?