Blockbuster (BBI) is laying the groundwork for a Chapter 11 bankruptcy filing in mid-September, according to a report in The Los Angeles Times.
The publication, citing several anonymous sources, says Blockbuster CEO Jim Keyes, the company's senior debt holders and representatives from six major studios held meetings throughout last week to discuss the potential restructuring plans. The struggling brick-and-mortar video store was apparently seeking buy-in from the studios, upon whom it depends for new DVDs.
To conserve cash, Blockbuster apparently seeks to use the bankruptcy to unload roughly 500 to 800 lease contracts, which would lead to even more store closures on top of the 1,000 sites it closed last year, the Times noted.
Blockbuster, which is staggering under approximately $1 billion in debt, hopes to enter into a pre-planned bankruptcy from which it would emerge within five months, according the the report.
As far back as last March, the company was already signaling to Wall Street that it might file for a pre-planned, pre-packaged bankruptcy.
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