• 31
  • August
    2010

Blockbuster has been struggling for the last few years with overwhelming debt and with figuring out how to adjust its home video business to fit current consumer needs. The company experienced incredible growth in the 1980s and 1990s, but has struggled as more consumers have opted for different movie rental options and models, such as DVD kiosks and Netflix's mailed DVDs.

Blockbuster has said that it is $1 billion in debt. The company has warned shareholders that filing for Chapter 11 Bankruptcy is an option that it is exploring. According to The Wall Street Journal, Blockbuster has been looking into filing for Chapter 11 protection in order to free itself from its $1 billion debt and also end 500 leases of its 3,425 U.S. store locations. 

Blockbuster would not confirm reports that it was going to file for bankruptcy. The company says that it is exploring all options for recapitalization through discussions with bondholders and studios. The company missed a $42 million payment to bondholders earlier this year and the deadline was extended to September 30. There is speculation that Blockbuster could file for bankruptcy as early as next month. 

Source:

Blockbuster Said To Be Exploring All Options (The Wall Street Journal)