Blockbuster Files For Chapter 11 Bankruptcy Proceedings
After struggling with nearly $1 billion in debt and growing competition from Redbox and Netflix, Blockbuster has finally filed for Chapter 11 bankruptcy protection on Thursday. This has been in the works for some time and was expected to happen sooner rather than later. The company not plans to pursue its strategic plan and transform its business model. This means more focus on kiosk deliver systems. The recapitalization plan should substantially reduce the Company’s indebtedness — from nearly $1 billion currently to an estimated $100 million or less when implemented.
Jim Keyes, Chairman and Chief Executive Officer, commented, “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. 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.”
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