Last month, executives from Blockbuster Inc. negotiated with debt holders and announced that they were creating a plan for the company to file for bankruptcy protection. Last week, the company officially filed for Chapter 11 protection in order to reorganize the business and pay of debt holders.
With the filing Blockbuster hopes to reduce their debt from nearly $1 billion to $100 million through the transfer of debt to equity. Note holders agreed to fund $125 million of debtor-in-possession funds for Blockbuster to pay off its employees, suppliers and customers.
Blockbuster CEO Jim Keyes said, “After a careful and thorough analysis, we determined that the process announced [Sept. 23] provides the optimal path for recapitalizing our balance sheet and positioning Blockbuster for the future as we continue to transform our business model to meet the evolving preferences of our customers”.
Blockbuster’s remaining 3,000 stores, online rentals, and kiosk vending machines will continue to operate normally. Additionally, international stores are not affected by the bankruptcy.
If you or someone you know needs help negotiating their debts, contact the Milwaukee debt negotiation attorneys of DeLadurantey Law Office, LLC at 414-377-0518 to learn more about your rights.