Legal News

Movie Gallery plans to close all stores, liquidate

By (Breaking Legal News)

Movie Gallery Inc., the owner of struggling movie rental chain Hollywood Video, is planning to close its remaining stores and liquidate as consumers are increasingly get movies through the mail, vending machines and high-speed Internet connections.

The No. 2 rental chain behind Blockbuster Inc. filed a notice with the U.S. Bankruptcy Court for the Eastern District of Virginia in Richmond late last week that it will terminate its business operations after defaulting on a loan from one of its creditors.

An agreement filed with the court sais the move to close more than 1,900 remaining stores is in the "best interests" of the company and its creditors. The agreement does not specify a time line. It must be approved by a bankruptcy judge.

Phone calls to Movie Gallery and an attorney representing the company were not immediately returned.

The company, based in Wilsonville, Ore., filed for Chapter 11 bankruptcy in February, buckling under the competitive pressure from movies-by-mail service Netflix Inc., DVD kiosk company Redbox and delivery of movies and TV shows over the Internet.

Full post as published by Breaking Legal News on May 11, 2010 (boomark / email).