Blockbuster Files for Bankruptcy
September 23, 2010 10:49 PM
comment(s) - last by
Rivals like Redbox and Netflix took over the video-renting market
After a failed attempt at trying to transition from a storefront model to renting through the mail and on the Internet like
Blockbuster Inc. has filed for bankruptcy
The world's largest movie rental company
filed for Chapter 11
September 23 in U.S. Bankruptcy Court in New York, with a petition that showed assets of $1.02 billion against $1.46 billion of debt. Blockbuster settled on a plan with bondholders, who hold 80.1 percent of Blockbuster's 11 3/4 percent senior-secured notes, to restructure and secure a $125 million loan "to finance operations."
This $125 million is new cash availability, and $45 million would be available before final approval on an interim basis. This secured financing also requires the conversion of $250 million of existing secured debt "into a new loan with a lien ahead of
." The new plan states that no recovery by holder's of Blockbuster's outstanding subordinated debt will be allowed, and the company hopes to pay an undesignated amount to unsecured creditors. Twelve Blockbuster units joined this protection, including Blockbuster International Spain Inc., Blockbuster Canada Inc. and Blockbuster Video Italy Inc.
"To preserve its three-decade long developed brand value, Blockbuster seeks a restructuring that permits a significant deleveraging of its business so that it can move forward at the digital clip at which its industry and competitors are currently running," said Jeffery Stegenga, the company's restructuring officer.
Several companies are waiting to be paid by Blockbuster, including Twentieth Century Fox Home Entertainment with a $21.6 million claim. Others waiting in line are Warner Home Video Inc. with a $19 million claim, Sony Pictures Home Entertainment with a $13.3 million claim, Coca-Cola Enterprises with a $703,412 claim and Moelis & Co. with a $254,050 claim.
Before coming to this decision to claim bankruptcy, Blockbuster spoke with other companies throughout the spring and summer in hopes of making a financial deal, but none of them could provide enough money to cut Blockbuster's debt significantly.
Several reports note that Internet and mail-based companies like Netflix as well as rentals available in vending machines
store-based model. Blockbuster attempted to transition to this type of model with express kiosks they called "Bluebox," and obviously it failed.
All of Blockbuster's stores, kiosks and digital businesses will resume as normal, and coming out of bankruptcy, the only debt the company will have to pay is the $125 million loan.
This article is over a month old, voting and posting comments is disabled
Capitalism at its best
9/27/2010 3:20:13 PM
Thank you for your services Blockbuster, and farewell.
"Intel is investing heavily (think gazillions of dollars and bazillions of engineering man hours) in resources to create an Intel host controllers spec in order to speed time to market of the USB 3.0 technology." -- Intel blogger Nick Knupffer
Tesla's Losses Widen to $38.5M USD as it Tries to Bring Model S to Market
August 6, 2010, 10:07 AM
Redbox Stuffs Kiosks with Blu-ray Flicks in Some Markets
July 30, 2010, 7:49 AM
T-Mobile, Blockbuster Make 2011's List of Potentially Doomed Companies
July 12, 2010, 7:42 PM
Netflix New Rental Gamble: CEO Says Cuts are Good for Customers
January 20, 2010, 10:27 AM
Latest By Tiffany Kaiser
Apple Racked Up 4 Million iPhone 6, iPhone 6 Plus Pre-orders Within 24 Hours
September 15, 2014, 9:54 AM
China to Require Real Names for Chat Apps
August 8, 2014, 8:28 PM
Quick Note: Windows Phone Store Surpasses 300,000 Apps
August 8, 2014, 12:30 PM
Google, Yahoo Working Together on Encrypted Email Tool
August 8, 2014, 7:23 AM
Edward Snowden's New Residence Permit Allows Another 3 Years in Russia
August 7, 2014, 2:41 PM
T-Mobile Beats Sprint in Prepaid Subscriber Numbers, John Legere Ribs New Sprint CEO
August 7, 2014, 11:55 AM
Microsoft Surface Losses Total $676M USD for FY2014; Will Launch in 25 Additional Markets
August 6, 2014, 1:07 PM
Quick Note: Microsoft Giving Nokia 630s to Employees Laid Off in China
August 6, 2014, 1:03 PM
Ten Apple Products Cut From China's Procurement List
August 6, 2014, 11:45 AM
Xiaomi Passes Samsung, Lenovo in China's Q2 Smartphone Shipments
August 5, 2014, 1:50 PM
5 Top Rated Printers for Home or Small Office
July 29, 2016, 10:44 PM
5 Excellent Cable Modems: Buy Your Own and Avoid Rental Fees
July 28, 2016, 8:44 PM
"Prepare to be Punished": Microsoft is Killing OneDrive With Cuts, Blames Users
November 3, 2015, 8:23 PM
Apple's New "Magic" Peripheral Line Packs High Tech, High Prices
October 13, 2015, 9:39 PM
Samsung Adds 2 TB 850 EVO, PRO SSDs for $800, $1000
July 7, 2015, 4:23 PM
Seagate Senior Researcher: Heat Can Kill Data on Stored SSDs
May 13, 2015, 2:49 PM
Most Popular Articles
Get Ready to wait in line – iPhone 7 due September.
August 18, 2016, 7:15 AM
Lenovo vs. Asus vs. HP - Best Laptop Under $500.00
August 19, 2016, 4:00 AM
Wearable Technology for Peanut Allergy Sufferers: By Monique Bethell Ph.D.
August 17, 2016, 6:40 AM
5 Healthy and Creative ways to add Fiber to your Diet By Monique C. Bethell, Ph.D.
August 18, 2016, 7:43 AM
Fuchsia – Google’s New Open Source Operating System
August 17, 2016, 6:30 AM
Latest Blog Posts
SolarCity’s Gigafactory: A Milesone in Emerging Technology by Lily Emamian - 15 August 2016
Aug 15, 2016, 6:30 AM
Sceptre Airs 27", 120 Hz. 1080p Monitor/HDTV w/ 5 ms Response Time for $220
Dec 3, 2014, 10:32 PM
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
More Blog Posts
Copyright 2016 DailyTech LLC. -
Terms, Conditions & Privacy Information