Blockbuster files for bankruptcy
Chapter 11 protection will allow the video-rental chain to cut nearly $900 million in debt and continue store operations, but it leaves shareholders empty-handed.
By Jeanine Poggi, TheStreet
The long-awaited Blockbuster (BLOKA) bankruptcy filing came in the wee hours this morning. The Chapter 11 restructuring will allow the company to cut debt by nearly $900 million while continuing to operate stores and kiosks.
Shareholders and investors holding subordinate debt -- who stuck by the company through the past year of bankruptcy scares and ongoing discussions -- are out of luck.
More than 80% of the company's senior noteholders have agreed to support the plan and provide $125 million in "debtor-in-possession" financing to help support Blockbuster's operations while it undergoes the restructure. Under the plan, bonds will be converted into equity.
The restructure does not include Blockbuster's international operations, and in a separate release Blockbuster Canada said business will go on as usual.
Blockbuster has been struggling to make debt payments, pushing off a $42 million payment two times over the summer. It was scheduled to make that payment on Sept. 30.
While right now Blockbuster will continue operations, the company did say it will re-evaluate its portfolio of more than 3,000 stores.
Rival Movie Gallery filed for Chapter 11 protection earlier in the year but ultimately ended up liquidating its assets.
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information.
[BRIEFING.COM] The major averages have slipped back into negative territory and are in the midst of digesting some comments made in a speech today by Chicago Fed President Evans.
Mr. Evans carries a reputation for being one of the most dovish members at the Fed. Importantly, he is also a voting member of the FOMC this year. He said he is confident the Fed has the right accommodation in place and that he expects a self-sustaining recovery by 2014. It is ... More
More Market News
|There’s a problem getting this information right now. Please try again later.|
LATEST MARKET DISPATCHES
- No more Dispatches; here's where to find market news
The Market Dispatches column has been discontinued. Here's where to find the latest stock and business news on MSN Money, and the latest from market writer Charley Blaine.
- Dow falls 59 as late-day gloom kills a rally
- Stocks held back by fiscal-cliff worries
- Stocks suffer worst weekly loss in 5 months
- Dow off 121 as post-election swoon continues
- Dow slumps 313 after Obama's re-election
- Dow jumps 133 as Americans head to the polls
When it comes to efficiency gains, a watt saved is a watt earned.