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BLOCKBUSTER SAYS CAPITOL SUITS WITHOUT MERIT; FRANCHISEE IN DEFAULT OF AGREEMENTS

 BLOCKBUSTER SAYS CAPITOL SUITS WITHOUT MERIT;
 FRANCHISEE IN DEFAULT OF AGREEMENTS
 FORT LAUDERDALE, Fla., March 4 /PRNewswire/ -- Blockbuster Entertainment Corporation (NYSE: BV) announced today that the lawsuits relating to its franchisee, Capitol Entertainment, which were the subject of various news reports today, were precipitated by a recent notice sent by the company to Capitol Entertainment. The notice informed Capitol Entertainment that its rights to develop additional Blockbuster Video stores in the Washington D.C. area under certain franchise development agreements with the company had expired by their terms and that at the time of their expiration Capitol Entertainment was in default of its development obligations under the agreements.
 The company believes the lawsuits filed by Capitol Entertainment relate to the acquisition of Erol's Inc. in April 1991 and the continued operation of certain Erol's stores. The company believes that its acquisition of the Erol's Video chain and its subsequent operation or Erol's stores are expressly within the company's rights under its various agreements with Capitol Entertainment. The company believes that the lawsuits filed by Capitol Entertainment are without merit and do not reflect Capitol Entertainment's rights under its franchise agreements with the company.
 The company intends to defend these lawsuits vigorously.
 At the end of 1991, there were 2,028 stores in the Blockbuster system, of which 1,025 were company-owned and 1,003 were franchise- owned. The system operates stores in 46 states, the District of Columbia and in Austria, Australia, Canada, Chile, Guam, Japan, Mexico, Puerto Rico, Spain, the United Kingdom and Venezuela.
 -0- 3/4/92
 /CONTACT: Wally Knief of Blockbuster Entertainment Corporation, 305-524-8200/
 (BV) CO: Blockbuster Entertainment Corporation; Capitol Entertainment ST: Florida IN: REA SU:


JJ-SS -- FL002 -- 4860 03/04/92 10:07 EST
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Publication:PR Newswire
Date:Mar 4, 1992
Words:288
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