Don't miss

Replay


LATEST SHOWS

ENCORE!

Photographer Clare Strand explores the causes and consequences of communication breakdown

Read more

IN THE PRESS

Fashion and ethics: Five years after Bangladesh factory collapse, what's changed?

Read more

FOCUS

Israel’s migrant crisis: Clear government signals, but unclear decisions

Read more

PERSPECTIVE

Plastic waste: ‘We can only tackle the problem if we work together’

Read more

MEDIAWATCH

Louis XIV's message for the British royal baby

Read more

EYE ON AFRICA

Zimbabwean nurses call off strike and return to work

Read more

THE DEBATE

Macron meets Trump: A state visit with discord on the horizon?

Read more

BUSINESS DAILY

Macron hopes for breakthrough on trade tensions during US visit

Read more

ENCORE!

Music show: Mahalia, Ariana Grande & Willie Nelson

Read more

Business

Video rental giant Blockbuster files for bankruptcy

Text by News Wires

Latest update : 2010-09-23

Blockbuster, once America’s favourite provider of home entertainment in the form of rented videos and DVDs, has finally declared bankruptcy after a long struggle with internet-based movie suppliers.

 

AP - Troubled video-rental chain Blockbuster Inc. filed for bankruptcy, and said it plans to keep stores and kiosks open as it reorganizes.
 
In a submission to the U.S. Bankruptcy Court in the Southern District of New York on Thursday, the company said it reached an agreement with bondholders on a recapitalization plan.
 
Blockbuster plans to reduce debt from nearly $1 billion to about $100 million or less by swapping debt for equity in a reorganized Blockbuster with bondholders that hold about 80.1 percent of the company’s senior notes.
 
It has received commitments for $125 million in “debtor-in-possession” financing from senior noteholders to repay customers, suppliers and employees during the reorganization.
 
“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,” said CEO Jim Keyes.
 
Once a home entertainment powerhouse, Blockbuster has been losing market share and money for years as more Americans rent DVDs from subscription service Netflix Inc. and popularity surged for streaming video over the Internet.
 
Blockbuster said its 3,000 stores in the U.S., DVD vending kiosks, by-mail and digital businesses will all continue to operate normally. Operations outside the U.S. and domestic and international franchisees are not part of the Chapter 11 reorganization.
 
Earlier this year the company said it would close hundreds of stores and said it was struggling with liquidity problems.
 
The company, which had warned investors it might file for bankruptcy protection, was delisted in early July by the New York Stock Exchange.
 
Image by Flickr user TheTruthAbout used under the creative commons license.

 

Date created : 2010-09-23

COMMENT(S)