In an announcement that has long been expected, Blockbuster has officially initiated pre-arranged chapter 11 bankruptcy.
According to a release from the company, the current plan will reduce the company's debt from "nearly $1 billion to an estimated $100 million or less when implemented."
For now, Blockbuster is evaluating its U.S. store portfolio but according to Engadget who spoke with a "trusted tipster" rumors are pending that the company could shed another 1,000 stores before the company immerses from Chapter 11.
While bankruptcy may see like bad news for the company, according to Blockbuster CEO Jim Keyes, the implementation of Chapter 11 will allow the company to reorganize its business model to "meet the evolving preferences of our customers.
"After a careful and thorough analysis, we determined that the process announced today provides the optimal path for recapitalizing our balance sheet and positioning Blockbuster for the future as we continue to transform our business model to meet the evolving preferences of our customers." Keyes said in a press release.
"The recapitalized Blockbuster will move forward better able to leverage its strong strategic position, including a well-established brand name, an exceptional library of more than 125,000 titles, and our position as the only operator that provides access across multiple delivery channels – stores, kiosks, by-mail and digital. This variety of delivery channels provides unrivaled convenience, service, and value for our customers."
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