Blockbuster recently told movie studios and their senior creditors that they are looking at filing for bankruptcy in mid-September. The movie rental company, which has suffered since the growing popularity of Netflix and Redbox, owes almost $1 billion in debt. Blockbuster stock was closed last month at 11 cents a share after being delisted from the New York Stock Exchange.
Blockbuster executives plan to restructure the company in order to pay off its debts and hopefully exit bankruptcy within five months. One part of their plan is to exit leases on between 500 and 800 of its stores across the country. Last year, 1,000 Blockbuster stores were forced to close down due to slowing business. If their restructuring is successful, the company hopes to expand into digital and kiosk distribution.
“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,” stated a Blockbuster spokesperson.
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