• 21
  • January
    2011

Last September, Blockbuster Inc. filed for Chapter 11 bankruptcy. A restructuring deal was made at the time that will cut the company's debts from $900 million to $100 million. According to The Wall Street Journal, on Wednesday, a judge granted the company more time to be in control of its bankruptcy proceedings. The company now has until March 21 to file a plan for bankruptcy. The deadline for soliciting votes on the plan was extended until May 20.

The video chain's plan to regain control of their finances and become solvent involves closing many of its brick-and-mortar stores and focusing the business more on DVD mailings and online video distribution. The plan also involves putting senior noteholders in control of the company.

Blockbuster was challenged by the landlords of its stores who said that the company was exercising too much power over how it was closing its stores, but the company settled that dispute. They also settled an issue with state taxing authorities. The judge gave Blockbuster approval on its plan for closing more stores. The judge also rejected a request by an ad-hoc committee of Blockbuster's equity holders to examine the company's finances.

Source:

Blockbuster Gets More Time for Bankruptcy Plan (The Wall Street Journal)