Movie Gallery allowed to pay supplier, game vendors

UPDATE: Retailer requests end to dispute with former Hollywood Video CEO

By Cindy Spielvogel -- Video Business, 11/29/2007

NOV. 29 | At a hearing Nov. 28, Movie Gallery was given permission by the U.S. bankruptcy court to pay the smaller suppliers and game vendors it wants to continue doing business with, in addition to larger studios.

The rental chain, which filed for bankruptcy Oct. 16, had previously been granted approval to continue doing business with the larger studios.

Movie Gallery reported in a filing that it owes a combined $4 million to the smaller suppliers.

The company is expected to come out of bankruptcy sometime next year.

Separately, Movie Gallery filed a motion with the bankruptcy court for the chain to sever its business relationship with former Hollywood Entertainment CEO Mark Wattles.

Movie Gallery has been in an ongoing dispute with Wattles over purchasing about 20stores that Wattles retained under a licensing agreement after selling Hollywood to Movie Gallery in 2005. The court has not yet ruled in the matter.