A Bankrupt Blockbuster Is Closer Than You Think

Over the past year or so, Blockbuster has had growing concerns about just what their financial future, particularly with competitors like Redbox and Netflix, would be.

Well, according to 24/7 Wall Street, the company may in fact be facing bankruptcy.

The outlet is reporting that the company is in a battle with bondholders over ‘terms for restructuring Blockbuster’s debt of about $900 million.’ The fight involves bondholders who are willing to eliminate just around $300 million in debt for what the Wall Street Journal is calling a ‘lion’s share’ of the company’s new equity.

Another discussion that is going on, is about $630 million which bondholders are owed, with Blockbuster trying to get the creditors to cancel $20 million in quarterly amortization payments. This group of bondholders also want a ‘lion’s share’ of the company.

The third possibility for Blockbuster involves NCR Corp. NCR Corp is the group that creates video rental kiosks for the company, and the same company that has just introduced new kiosks to major Texas Markets according to Market Watch. The company would come in, make a major investment in the company, thus clearing the debt.

However, if this all falls apart, and no deal is reached, bankruptcy is in Blockbuster’s imminent future, and with retailers like Movie Gallery now closed after filling, things are not looking up for the video rental giant. And honestly, while it may be sad to see them go, the writing has really been on the wall for a while. Netflix is growing to be the go to outlet for video renting, with their amazing selection, online streaming, and no late fees, and Redbox is making the market an even tougher place with their low price and easy access/return policy. A deal better be met, or this may be the harbinger of doom for Blockbuster.

Source: 24/7 Wall St. / Market Watch

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