BlockbusterStruggling video rental chain Blockbuster has filed for bankruptcy as part of a plan to recapitalize the company and reduce its debt.

The company filed voluntary chapter 11 petitions in the U.S. Bankruptcy Court for the Southern District of New York, Blockbuster said in a statement.

Blockbuster's franchisees and non-U.S. operations were not part of the filing, and all operations will continue business as normal.

"The process announced today provides the optimal path for recapitalizing our balance sheet and positioning Blockbuster for the future," CEO Jim Keyes said.

The bankruptcy filing is part of a plan to slash the company's debt from almost $1 billion to an estimated $100 million, Blockbuster said. The company agreed the deal with a group of creditors, who committed $125 million of new financing and will exchange their bonds for shares in the newly organized company.

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VincentMVNY

There will no doubt be many PhD thesis papers written covering this unbelievable marketing boonswaggle. How on earth can a company with all of the advantages being first gives a company fail to see where the market was going? They were the first and largest entry in the video rental business. I'd love to know which individual or what 'committee' was responsible for not only not looking at the horizon but worse still not ever attempting to look over the horizon. Capitalism is self-cleansing because it relentlessly punishes the stupid. Are you listening Obama?

September 23 2010 at 7:42 PM Report abuse +1 rate up rate down Reply
badoldtom

Too much on line competition, like netflix...so far it is fine in Canada.

September 23 2010 at 7:30 PM Report abuse rate up rate down Reply
conglomorateman

I love the comments blaming the fail of outdated, stagnant, bloated, non evolutionary businesses on politics. Businesses are like animals, you evolve to eat and fight off predators or you die to them.You can not compete with internet based businesses with millions of dollars less in overhead by having tens of thousands of stores run by non caring late high school and college kids. Blockbuster should have been moving its eggs into the net basket and out of the brick and mortar years ago. Its called market research. If your profits are being split by a new comer doing something different, then apparently the market wants what they are offering. You people are about as unfit to run business as they were.

September 23 2010 at 5:20 PM Report abuse rate up rate down Reply
Ed Baggett

No cars in the BB parking lot anymore..........

September 23 2010 at 4:45 PM Report abuse rate up rate down Reply
jleup77276

I saw this coming years ago when Blockbuster raised my monthly rental charge 40% and expected me to just take it. As for Netflix, they are doomed as well. Has anyone seen a single movie on their website that you would WANT to watch? I sure haven't.

September 23 2010 at 3:27 PM Report abuse +3 rate up rate down Reply
MEIRKUBA

more on the unemployment list that will never end .thank you verry much mr president .what this students going to do when they finish college .

September 23 2010 at 3:26 PM Report abuse rate up rate down Reply
jwtazz4

There have also been reports of people haveing problems with netflix. When they have movies out and then cancel their plans the movies all of the sudden got lost and the member was made to pay for the movie. So anywhere you go you have crooks. No company is free of these problems.

September 23 2010 at 2:47 PM Report abuse +1 rate up rate down Reply
Bob Shaw

Isn't it interesting how a big company can reduce their debt by $900M, and turn around and get financing. Who pays for the loss? But, an individual or small business is just xxxx out of luck.

September 23 2010 at 2:20 PM Report abuse +1 rate up rate down Reply
valgaavmiko

About time. Who in their right mind tries to stay in business with the same exact business model when a new competitor comes out with a better one. Blockbuster didn't even TRY.

September 23 2010 at 1:57 PM Report abuse rate up rate down Reply
Iselin007

Don't let them cut in front of you in the cheese line they already got a swell head

September 23 2010 at 1:30 PM Report abuse rate up rate down Reply