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The writing is on the wall for fallen titan Blockbuster, and it apparently spells bankruptcy. The Los Angeles Times, citing “people who have been briefed on the matter” is reporting that Blockbuster will be filing for bankruptcy in the middle of September. BB’s move would likely be a “pre-planned bankruptcy,” which means that the majority—but not all—of its debt holders would give their assent before the filing.

As part of the anticipated five-month bankruptcy process, Blockbuster will likely close another 500 to 800 underperforming stores.

The Times is reporting that BB CEO Jim Keyes has held a series of meetings with executives from 20th Century Fox, Paramount Pictures, Sony Pictures, Universal Pictures and Warner Bros. According to the Times, “[Keyes] was joined by a team of restructuring consultants hired to help turn around the struggling company, along with its senior debt holders who would likely end up owning a substantial portion of Blockbuster following bankruptcy.”

A Blockbuster spokeswoman refused to comment on Keyes’ meetings, offering only the following:

“The extension of our forbearance agreement is a strong sign of support from our senior secured noteholders as we work toward putting in place a more appropriate capital structure to support Blockbuster’s long-term growth … Our discussions continue to be productive and we have every reason to believe we will come out of the recapitalization process financially stronger and more competitively positioned for the future.”

Will bankruptcy help Blockbuster get its house in order and allow it to continue as a viable video rental option? Many of the studios certainly hope so, as they want Redbox and Netflix to continue to have a competitor more willing to toe Hollywood’s line. Hit the comments and let us know what you think about the chances of BB going BK.

(via the Los Angeles Times)

12 Responses to “Report: Blockbuster to File for Bankruptcy Next Month”

  1. Visitor [Join Now]
    Marc [visitor]

    I honestly have always loved going to Blockbuster. It is just a lot more fun than just going to a machine to rent a movie. I like to walk around the store and see all there is to rent. I think what they should have done a long time ago is go the $1 a day route and advertise that. There are a lot of different things they could do with their stores and their large member base that they just have not done. They absolutely need to ADVERTISE a $1 a day rental policy (it already is kind of this way) for both movies AND games. Blockbuster is so far the only place to rent games so they should capitalize on that more as well.

  2. Visitor [Join Now]
    Tee [visitor]

    At 1 billion in debt, I wonder what their Acct’s payable is to the studio’s. Gotta guess 200 mil. +, anybody care to give it a guess.

  3. Visitor [Join Now]
    marcos madi [visitor]

    I just can’t forget those times when BB would gobble up your pockets for late returns at astronomically high late fees, then ban you from renting new ones for days.

  4. Visitor [Join Now]
    Jamie [visitor]

    Their customer unfriendly policies definitely bit them in the rear end because they never considered that there would be enough competition to take a bite into those unhappy customers.

    Wrong. Big time wrong. BB took their customers for granted for too long.

  5. Visitor [Join Now]
    Jim [visitor]

    Block Bluster Prices Are way to high, for one rental, if one is late on a return all the fees that add up, you end up paying for it at retail price, one can buy that DVD at BestBuy or Walmart for cheaper prices. Thier Online rental program similar to netflix has a bad turn over rate. Netflix is alot faster than blockbuster online. Some of thier store employees are ignorant, rude, and non-business like. There are or never has been to many stores around. BlockBuster Express Kiosks now have a poor selection of titles, and thier recipt email turn around time is horrible. All in all Family Video charges $2.79 + tax for one nite rental, and thier half off program, and thier midweek speacials are great. Thier Store employees are friendly and thier selection is great. Family Video methods are for thier customers, and with thier pricing and advertising structure I think they will be here for a long time. So I hope block buster gets what they deserve!

  6. Member [Join Now]
    alans613

    I think even Stevie Wonder saw this one coming from a mile away. It sounds like BB is trying to spin things to these studio heads. I wonder how bad things really are.
    Blockbuster By Mail has a good selection of movies and isn’t bad, but has a horrible turn around rate. Netflix is much faster turning around your DVDs than BB By Mail. One of the good things is if there is an embargoed title I want, I take my mail rental to the store and exchange it for the embargoed title. I like BB By Mail and Netflix both…both have their advantages and disadvantages. BB By Mail doesn’t stream to your game console, but NF does. It’s give or take, more or less.

  7. Visitor [Join Now]
    will [visitor]

    It’s well-established by now that Blockbuster can’t do anything more about its debt burden outside of Chapter 11. The best it can hope for is a pre-packaged filing which I speculated about in this forum a couple of months ago and now seems to be coming to fruition. But, even with underperforming stores closed and much of its debt burden erased, Blockbuster’s brand image with much of the public is hopelessly outdated and outright toxic with respect to late fees and other customer service issues. So, while we’re speculating again, I’ll say Chapter 11 now, then Chapter 7 when the restructuring ultimately fails.

  8. Visitor [Join Now]
    Roger [visitor]

    I think they should just close all the blockbuster stores. Blockbuster is just putting themselves in a bigger hole as Redbox & Netflix is growing. I used to know a lot of people and myself that used to go to blockbuster which you no longer go to since Redbox came out. Lets face it why would you spends $3 – $5 for a rental when you could pay $1. Not to mention to return your movie to blockbuster you have to go to a blockbuster location, when redbox is everywhere. For example the closest Blockbuster is over 4 miles from my house the closest Redbox is less then 2 miles.

  9. Visitor [Join Now]
    Nomo Blockbuster [visitor]

    I do not know where Blockbuster gets this concept of ‘underperforming stores’ and quite frankly, it is irrelevant as the stores are irrelevant and ALL, not some, ALL need to go.