Blockbuster files for bankruptcySeptember 23rd, 2010 - 9:24 pm ICT by BNO News
DALLAS, TEXAS (BNO NEWS) — Blockbuster Inc. on Thursday announced that it has filed for bankruptcy after unsuccessfully competing with new technologies and online competition.
Blockbuster, based in Dallas, Texas and one of the world’s leading movie-rental companies, filed voluntary Chapter 11 petitions with the U.S. Bankruptcy Court for the Southern District of New York, saying its recapitalization plan would substantially reduce the Company’s indebtedness - from nearly $1 billion currently to an estimated $100 million or less when implemented.
The company also announced it had secured a $125 million “debtor-in-possession” (DIP) financing from the Senior Noteholders loan and reached agreement with a group of bondholders holding approximately 80.1 percent principal amount of the Company’s 11 3/4 percent senior secured notes as it seeks to restructure its financial operations.
“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 to meet the evolving preferences of our customers,” Jim Keyes, Chairman and Chief Executive Officer, said.
“The recapitalized Blockbuster will move forward better able to leverage its strong strategic position, including a well-established brand name, an exceptional library of more than 125,000 titles, and our position as the only operator that provides access across multiple delivery channels – stores, kiosks, by-mail and digital. This variety of delivery channels provides unrivaled convenience, service, and value for our customers,” Keyes added.
Blockbuster’s non-U.S. operations and its domestic and international franchisees, all of which are legally separate entities, independently owned, operated and funded, were not included in the filings and are not parties to the Chapter 11 proceedings.
All of Blockbuster’s U.S. operations, including its stores, DVD vending kiosks, by-mail and digital businesses, are open and serving customers in the normal course, the company said.
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