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
9/30/2010 1:49:04 AM
They made a metion of that in the article. The company was able to get a loan to finance them through bankrupcy, which made the process available.
There was not a single company willing to put sufficient cash in GM to keep it operational.
There are more companies willing to risk $125 million than $20 billion...
"What would I do? I'd shut it down and give the money back to the shareholders." -- Michael Dell, after being asked what to do with Apple Computer in 1997
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
Mark Zuckerberg: Facebook Home Reception Slower than Expected, Social Graph Will Pick Up
April 16, 2014, 2:00 PM
SpaceX Leases Apollo 11 Launchpad for 20 Years
April 16, 2014, 1:52 PM
Direct Auto Sales Bill Fizzles Out in Arizona Senate; Tesla Motors Will Try Again
April 15, 2014, 7:00 PM
FBI's Facial Recognition Database to Have 52 Million Criminal, Non-Criminal Photos by 2015
April 15, 2014, 2:56 PM
Microsoft's Anti-Google "Scroogled" Campaign May Have Ended
April 15, 2014, 2:44 PM
FAA Requiring All Flights to Have GPS Tracking System by 2020
April 15, 2014, 1:25 PM
Netflix Speeds Increase for Comcast Users Following Recent Agreement
April 14, 2014, 8:02 PM
New IPCC Report Says Climate Change Can be Warded Off Affordably
April 14, 2014, 4:44 PM
Facebook Awaiting Approval for New Mobile Payments Service
April 14, 2014, 2:02 PM
44 Percent of Twitter's Total Users Have Never Sent a Tweet
April 14, 2014, 7:55 AM
4/16/2014 Hardware Reviews
April 16, 2014, 9:01 AM
Quick Note: Kingston's 1 TB USB Stick Hits $899 on Lightning Deal
April 15, 2014, 3:35 PM
4/15/2014 Hardware Reviews
April 15, 2014, 11:30 AM
4/11/2014 Hardware Reviews
April 11, 2014, 11:03 AM
Global PC Shipments Declined 1.7 Percent in Q1 2014
April 10, 2014, 9:58 AM
Intel Previews Devil's Canyon Chip, "Black Book", and Broadwell
March 21, 2014, 8:15 AM
Most Popular Articles
Cities to Carpoolers: Sharing Your Car is Illegal, We Will Seize Your Cars
April 4, 2014, 9:17 PM
Taiwan's AOU Claims to Have World's Highest-Res. OLED Smartphone Display
April 11, 2014, 1:44 PM
iPad Exploiter is Freed by Federal Appeals Court
April 11, 2014, 7:40 PM
It's Very Likely Neanderthals and Humans Had Sex, Produced Offspring
April 10, 2014, 8:40 PM
A-10 Warthog May Live to Fight Another Day with Support from Lawmakers
April 14, 2014, 9:41 AM
Latest Blog Posts
Facebook Aims to Provide Internet to "Every Person in the World" with Drones, Satellites
Apr 1, 2014, 10:20 AM
Retail Mobile Sites Experience Outages in Light of Simplexity's Bankruptcy
Mar 14, 2014, 8:48 AM
Tesla vs. BMW: Who Has the Safer EV?
Feb 1, 2014, 2:56 PM
Justice Leaks Details of Next HTC One Two Flagship Phone
Dec 5, 2013, 4:04 PM
Global Cyber Espionage Concerns Reveal Growing Cyber Armies
Nov 29, 2013, 11:04 AM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information