With Blockbuster’s recent fall onto hard times, it looks like their biggest brick and mortar competition, Movie Gallery, is just about finished.
According to ABC News, Movie Gallery Inc. has had a plan for its remaining 1,050 stores to be closed and assets liquidated, by a federal bankruptcy judge in Richmond, VA this afternoon. The company filed for Chapter 11 bankruptcy in February, marking the companies second trip through the bankruptcy courts in three years.
Stores are set to be closed by the end of August, and the subsequent ‘going out of business’ sales are reportedly going to net the company more than $62 million. However, Bloomberg is reporting that the agreement does have a catch.
Movie Gallery Inc. lost a bid to attain a $1.75 million break-up fee that would go to Great American WF LLC if the liquidator ‘loses its bid to manage the sale of the video chain’s inventory.’ The company had seen two bidders looking to pick up the pieces here, so the judge found no need to level a fee. Great American stands to make $62.3 million from the aforementioned ‘going out of business’ sales.
With this news, one company ceases to exist, thus giving Blockbuster its first real glimpse of hope. It’s not much, and I think it’s just a matter of time before Blockbuster begins to follow suit here, but this is definitely a harbinger of what is to come in the world of video renting.
Hey, one thing to look forward to, massive sales of super cheap DVDs. It’s a win-win situation as long as your name doesn’t begin with Movie and end with Gallery.