It’s almost over.
According to The Wall Street Journal, Blockbuster Inc. filed for Chapter 11 bankruptcy protection Thursday morning, after a restructuring deal was finally reached by noteholders.
The outlet reports that the deal made here will cut the almost $1 billion debt that the brick and mortar video renting giant had, to just about $100 million, if not even less. I wish this could happen for my student loan debt.
Creditors, according to Lehman Brothers Holdings Inc. analysts, will get back roughly $57.5 billion (read: a pretty penny) which is more than was previously estimated when the company originally filed for a creditor repayment plan back in April.
Interesting to note here, the company’s chairman and CEO of Walt Disney, Michael Eisner, has said that it is ‘highly unlikely’ that he will be the chairman once the company rises from the ashes of this bankruptcy deal.
Personally, while I’m not quite sure where the company will be going from here, this is about as good of a thing as the company could have hoped for at this point. This will allow the company a window of time to come up with a new business model, one that is more attuned to battling their competitors in this new video renting market. I don’t think we’ll ever see Blockbuster get back to their former self, but today marks a new step in the company’s life, and in the world of video distribution.
What do you think about this news?
The Official Press Release from Blockbuster:
Blockbuster Continues to Offer the Best, Most Convenient Access to Hot New Releases Through its 28-Day Advantage and Multi-Channel Platform
DALLAS, Sept 23, 2010 /PRNewswire via COMTEX/ —
Blockbuster Inc. (Pink Sheets: BLOKA, BLOKB), a leading provider of media entertainment, is continuing to serve customers as usual as the Company takes action to become financially stronger to enhance its ability to provide the best, most convenient access to movies, TV and games.
* Blockbuster is open and serving customers. Through its stores, by-mail and digital businesses,Blockbuster iscontinuing to provide day-and-date, multi-channel access to new releases and fulfilling all orders as usual.
* BLOCKBUSTER Express vending kiosks, owned and operated through a relationship with NCR, also continue their operations in retail locations around the U.S.
* Blockbuster’s 28-day rental advantage continues. In addition to Blockbuster’s access to new releases as soon as they are available, we offer our customers the additional benefit of rental access to nearly 50 percent of those new releases 28 days before our top competitors are able to do so.
* The BLOCKBUSTER Rewards(TM) program remains in effect, and participating customers are continuing to accrue benefits and rewards as always.
* Blockbuster is continuing to honor BLOCKBUSTER GiftCards(R) as usual and will continue to make Blockbuster GiftCards(R) available for purchase.
* Store credits and valid coupons will be honored as usual.
Jim Keyes, Chairman and Chief Executive Officer, said, “For more than 25 years, Blockbuster has been the go-to source for the best selection of at-home movies and game entertainment. We are continuing to provide our customers with the same outstanding convenience, service and value that have defined Blockbuster from the start, while we take action to become financially stronger. We look forward to continuing to provide our customers with the best, most convenient access to brand new releases and to continuing to enhance the Blockbuster experience.”
Blockbuster today announced that it has reached agreement on the framework of a plan to recapitalize its balance sheet and has initiated Chapter 11 proceedings to implement this plan. Under the proposed recapitalization, Blockbuster would substantially reduce its debt and improve its financial condition.
More information about Blockbuster is available at www.blockbuster.com.
About Blockbuster Inc.
Blockbuster Inc. is a leading global provider of rental and retail movie and game entertainment. The Company provides customers with convenient access to media entertainment anywhere, any way they want it – whether in-store, by-mail, through vending kiosks or digitally to their homes and mobile devices. With a highly recognized brand and a library of more than 125,000 movie and game titles, Blockbuster leverages its multichannel presence to serve nearly 47 million global customers annually. The Company may be accessed worldwide at www.blockbuster.com.
SOURCE Blockbuster Inc.