It has been a long, hard road for Blockbuster, but today marks a particularly low point for the company. In hopes of reducing their massive debt, Blockbuster has announced that they will be filing Chapter 11 bankruptcy.
Chairman and CEO, Jim Keyes stated, “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.”
Referring to the proceedings as a “pre-arranged recapitalization,” Blockbuster plans to reduce their now $1 billion dollar debt to $100 million or less. The filing will not apply to any of Blockbuster’s international operations, only US based stores and services will be affected.
Blockbuster stated that their stores will continue to operate, with all 3,000 of them remaining open. The companies DVD vending kiosks, by-mail and digital services will also continue to operate as normal.
Blockbuster has been hit hard by the rise of rental-kiosks and streaming services such as Netflix. The company has implemented numerous new initiatives, the most recent a video game by mail service, but has gained little traction.
You can read Blockbusters full press release at their media site.
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