Legal Niches

Report: Blockbuster Headed for Chapter 11 Bankruptcy

By james_fudge

Reuters is reporting that retail video rental chain Blockbuster is preparing to file for Chapter 11 bankruptcy within the next few days. The Dallas-based video chain said earlier this year it planned to close around 10 percent of its rental outlets. Blockbuster is in serious debt: it currently has $900 million in debt, according to U.S. Securities and Exchange Commission filings by the company.

According to a source "close to the company,' Blockbuster is hashing out deals with debt holders that would allow it to continue operating but it would have to close hundreds of stores. Senior bondholders would convert about $630 million of debt into equity of a restructured company.

The company said in a statement to Reuters that it has the support "of a wide range of parties" and that it is working on "a more appropriate capital structure to support Blockbuster's long-term growth, including investments in our multi-channel platform and new opportunities."

The company is expected to file for bankruptcy in the next few days.

Full post as published by GamePolitics.com on September 22, 2010 (boomark / email).