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“While Blockbuster Canada will be consolidating certain stores in the next few weeks, the majority of its stores are continuing to operate in the ordinary course during the process,” Michael Creber of Grant Thornton said in a release.

“We are hopeful that the process approved last Friday will result in resolution of the issues currently facing Blockbuster Canada Co.”

Having acted as guarantor for the substantial debt amassed by its U.S. parent before going bankrupt, Blockbuster Canada became liable for repayment after the American company collapsed.

Attempting to keep the company afloat, the U.S. Blockbuster became heavily indebted to the large movie studios on which it was dependent for new releases. Court filings indicate Blockbuster still owes in excess of US$67-million to major Hollywood players such as Warner Bros., Twentieth Century Fox and Sony Pictures.

More than 1,300 smaller creditors are also awaiting repayment.

Since the U.S. chain become the property of Dish Network Corp. when the satellite operator placed a winning US$320-million bid for the company last month, Dish has tried to block the Canadian operations from using the Blockbuster name. In documents filed with a U.S. bankruptcy court last week, Grant Thornton argued for a Canadian court to weigh in on the matter.

As the American chain shrunk to less than 3,000 locations from a peak exceeding 9,000 — amid rising threats from online video providers such as Netflix Inc. and DVD rental kiosk firms such as Redbox Automated Retail LLC — the Canadian chain managed to survive for some time.

Now, it seems, that time is over.

jberkow@nationalpost.com