Blockbuster Video files for Chapter 11 bankruptcy protection
By Sean O’Connell
Hollywoodnews.com: Have you been to a Blockbuster Video lately? Does your town still have one? I know of at least four near my home that have shuttered, as the once-massive video chain crumbles under the weight of competition from Netflix, RedBox, and countless on-demand options.
The demise looks to continue, as Blockbuster filed for Chapter 11 bankruptcy protection this morning in the U.S. Bankruptcy Court in the Southern District of New York. According to a report, the company plans to operate its remaining 3,000 stores across the country, but will initiate a recapitalization plan that may allow investors and bondholders to recoup nearly $1 billion in debt.
“After a careful and thorough analysis, we determined that the process announced today provides the optimal path for recapitalizing our balance sheet and positioning Blockbuster for the future as we continue to transform our business model,” said CEO Jim Keyes.
Just how the company plans to transform that business model remains to be seen. Blockbuster has moved ahead by eliminating the company’s late fees and launching online and kiosk services. But until it gets its debt in check, it will not be able to keep up with the competition.
It will be interesting to see what the face of Blockbuster will look like in years to come … if it has any face left to speak of at all.
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