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Blockbuster Officially Files for Bankruptcy

By - Source: Tom's Guide US | B 38 comments

The day has come, my friends.

Earlier this week, the Wall Street Journal said Blockbuster was gearing up to file for Chapter 11 bankruptcy. The Journal's sources said that though creditors were still haggling over the finer details, the papers were all but ready to be filed and Blockbuster was expected to seal the deal before the end of the week.

Ars Technica reports that yesterday the movie rental company submitted its filing for Chapter 11 bankruptcy, requesting protection against its almost $1 billion worth of debt as it works on its restructuring plans. Blockbuster said the restructuring plan affects only its U.S. operations and stores it wholly owns. International branches (like Canadian stores, for example) and franchises will not be affected.

The company's stores will remain open, but the restructuring plan will see them focus on alternate sales channels, like digital distribution, mail-in and kiosks.

"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," CEO Jim Keyes said in a statement. "This variety of delivery channels provides unrivaled convenience, service, and value for our customers."

Blockbuster's massive debts have been wiped out by the filing, and the company has struck up a deal with senior stockholders, offering them equity in the new company in exchange for forgiving the debt.

Though it's big news, Blockbuster's bankruptcy filing isn’t exactly surprising. The company has had a bad year, kicking things off in January with the news that it would close 250 stores. Just a few weeks later, the company said it would close a further 500.

Source: Ars Technica

This thread is closed for comments
  • 9 Hide
    Marco925 , September 24, 2010 10:40 PM
    Ironic that picture is, where it has a Now Open Sign
  • 9 Hide
    fball922 , September 24, 2010 10:45 PM
    Is anyone really surprised by this? When you charge out the @$$ for a rental that you can either get cheaper elsewhere (Family Video), obtain digitally (Netflix Instant, other sources), or get as part of a subscription (ummmm... Netflix agfain), who would want to shop at a Blockbuster? I always hated those stores...
  • 3 Hide
    Anonymous , September 24, 2010 10:58 PM
    This is one of those "Thank God" events. Whoever runs -- excuse me -- ran that company should be pelted with broken-hinged jewel cases. From the horrible check-out lines (once-upon-a-time) to the inexcusable inability to recognize Netflix ascendancy, to the failure even to recognize the potential of a niche market with non-mainstream movies... Goodbye; you will not be missed. "Cranky Business Rules!"
  • Display all 38 comments.
  • 2 Hide
    spectrewind , September 24, 2010 10:59 PM
    fball922Is anyone really surprised by this? When you charge out the @$$ for a rental that you can either get cheaper elsewhere (Family Video), obtain digitally (Netflix Instant, other sources), or get as part of a subscription (ummmm... Netflix agfain), who would want to shop at a Blockbuster? I always hated those stores...

    Not at all. They need to compete with Netflix, that's it. If they cannot do that.... (survival of the fittest).
  • 6 Hide
    danhitchcock , September 24, 2010 11:07 PM
    hah what an interesting coincidence. The bottom of the page says
    Google Ads

    Netflix® Official Site
    Just $8.99 a month. No Late Fees. Over 100k titles - Free Trial.
  • 1 Hide
    jerreece , September 24, 2010 11:47 PM
    Hastings is my rental place in town. Smaller company I think, but quite frankly they have more movies in stock than any local Blockbuster I ever lived nearby. Plus they sell music, books, and other things.

    Plus, if you return the movie the very next day, you get like a $2.00 credit toward your next rental. I get free movie rentals all the time this way. AND, very few times have they been completely out of stock on a movie when I wanted it, because people bring them back next day.
  • 5 Hide
    Darkv1 , September 24, 2010 11:59 PM
    I think that Blockbuster might be too late to adequately start competing with Netflix and Redbox. They have a brand name that is associated with overpriced rentals, poor selection, and late fees. Too little too late Blockbuster.
  • 3 Hide
    mikem_90 , September 25, 2010 12:00 AM
    Marco925Ironic that picture is, where it has a Now Open Sign

    ...and an empty parking lot.

    I'm not surprised, Blockbuster was big in the 90s, but really didn't roll with the times, staying with high priced movies when they want to sell them. $49 for Disney's Hercules?? Ugh.

    Netflix swooped in and ate their lunch.
  • 0 Hide
    dalethepcman , September 25, 2010 12:02 AM
    Blockbuster would be best off selling its stores to netflix and throwing in the towel. Seriously its not like anyone will notice when they are gone.

    Now to hijack this thread..
    Do a goole image search for Jane, isn't she a cutie!! Ok, here come the weird part. Why does the map icon in the images have a caption of "FamileMap: Stalk People"

    Jane do you have a throng of personal stalkers?
  • 1 Hide
    failboat , September 25, 2010 12:08 AM
    I like how they are still in business. Sorry, investors. We are calling off the debt... We continue, but you lose your investment. But, hey, if your on the A list; we will give you a small portion of our bad company.
  • -1 Hide
    Aintry , September 25, 2010 12:22 AM
    They edited out the part where Netflix tells Blockbuster to bend over and squeal like pig.
  • 3 Hide
    eddieroolz , September 25, 2010 12:37 AM
    It was just a matter of time. Their business model was bound to fail.
  • 0 Hide
    fflam , September 25, 2010 1:47 AM
    i personally still go in to Blockbuster every once in a while (once every other month) its nice to go in a get a movie on the spur of the moment. and most of the movies i want redbox does not have. it will be interesting to see what happens with the "by mail" business model if the usps request to limit there delivery service to 5days a week.

    anyone know what came of that?
  • 3 Hide
    Pyroflea , September 25, 2010 3:00 AM
    Amazing they made it this long really.
  • 3 Hide
    cronik93 , September 25, 2010 5:51 AM
    I guess Pirate Bay and Netflix finally did it.
  • 0 Hide
    mx2138 , September 25, 2010 7:30 AM
  • 0 Hide
    soundefx , September 25, 2010 9:52 AM
    It was about time. They became too greedy and rather than working with people, they decided to start ripping them off.
  • 0 Hide
    techguy911 , September 25, 2010 11:55 AM
    I don't get it where i live there is 1 blockbuster it is always empty i can pay $7.99 for 1 movie or go across the street and get 4 for $4.99 , the problem is they are a dinosaur and if you can't evolve you are going to go extinct.
    I can rent movies much cheaper anywhere else i have no reason to rent from blockbuster, i use to have a membership but the prices kept climbing.
  • 1 Hide
    rajangel , September 25, 2010 12:23 PM
    holy crap these adds are annoying. request captcha to post.

    I never liked blockbuster because they had a "We don't have it in. Now bugger off attitude." Not to mention they don't have half the stuff in their stores. I may just as well wait two days to get it from Netflix.
  • 0 Hide
    jasonpwns , September 25, 2010 2:02 PM
    We used to rent our movies/games from movie gallery back in the day where n64 games and stuff ruled the shelves. Block buster was always over priced and Movie Gallery had lots more stuff it seemed like.
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