Even as a possible new trial on charges of distributing pornography looms over it, the Movie Buffs video store chain has filed for Chapter 11 bankruptcy.
Chain owner Susan Janae Kingston and general manager Larry Warren Peterman filed June 15 in the U.S. Bankruptcy Court for Utah for the Movie Buffs chain, listing a West Point, Davis County, address.Peterman said Monday that they have not yet filed a plan to reorganize the chain, which includes 14 stores in Utah and Wyoming. He said they still are assessing whether to close any stores, as well as other options like selling some of them.
He confirmed that they decided to file based on the possible loss of leases for "various reasons" and a combination of other things, including the effects of the pornography trial.
"It certainly was not a positive effect (on the business)," Peterman said. "We're in a reorganization, which means we need to assess the future of the company and the individual stores and their participation."
The pornography trial in 4th District Court ended last week when a six-member jury could not reach a consensus, and a mistrial was declared. Peterman had been charged with 15 counts of distributing pornographic material, a Class A misdemeanor, in connection with videos rented and sold at the American Fork and Lehi Movie Buffs stores in 1996.
Prosecutors have said they plan to proceed with another trial on the matter.
George H. Speciale, the attorney who is handling the bankruptcy case for Peterman and Kingston, said Monday it was too early to say what effect the filing could have on the company or its stores.
"I know that there's some interest in this criminal case in Utah County, and any time you involve lawyers in your business, it's going to have an impact on your business," Speciale said.
"Because they've been tied up with this other matter, their attention has just been diverted. The filing was necessitated by the threat of the loss of some leases, so we had to file on kind of an emergency basis. The result is that we don't have all the information assembled that will ultimately flesh out the picture of the business."
Doug Brockbank, an American Fork resident whose complaints initiated the Movie Buffs investigation, said his reaction to the bankruptcy would be different had it prompted closure of the Movie Buffs in Lehi. The American Fork store closed last year.
While Brockbank said he doesn't wish bankruptcy on anyone, store owners and managers need to be responsible for what they sell. Had the video store listened to thousands of residents who signed petitions opposing the type of movies it distributes, the case wouldn't have gone to trial, he said.
As it is, Brockbank sounds satisfied with the outcome.
"It's a great story of a neighborhood in essence taking back the community," he said.
The bankruptcy filing listed Movie Buffs as having between 200 and 999 creditors, assets of between $100,000 and $499,000 and liabilities between $1 million and $9,999,000.
Among the top 20 listed unsecured claims were one from Rentrak of Portland, Ore., for about $167,000 and one from Valley Record Distributors Inc. of Woodland, Calif., for about $128,000. Several other listed claims were from Salt Lake City, Ogden and Idaho property management companies, as well as one for about $12,000 from Mooney and Associates, the Salt Lake City law firm of Movie Buffs defense attorney Jerry Mooney.
Another claim received on June 22, after the initial filing, was from Hot Chixx Inc. of Van Nuys, Calif., for about $5,700.
The first meeting of creditors in the bankruptcy case is scheduled for July 22.
Speciale said reorganization plans are not required immediately upon filing a bankruptcy petition.
"Until I have the schedules and statements that are required to be filed, I won't have the information in the kind of form that I need in order to look at it and determine what we need to look at for a form of the plan, who gets what and how and when," he said.
Deseret News staff writer Dennis Romboy contributed to this report.