Blockbuster May Be Within Weeks of Bankruptcy
CEO Jim Keyes and other top execs from Blockbuster and its senior debt holders were in Hollywood to meet with major movie studios and discuss their plans to file bankruptcy in September. The company has dominated the home video rental business for more than a decade but is now struggling to survive as new technologies allow upstarts like NetFlix and RedBox to flourish at Blockbuster’s expense. Blockbuster is hoping to restructure a hefty debt load and to escape leases on at least 500 of its 34-hundred U-S stores. Business analysts believe maintaining the support of Hollywood’s film studios will be crucial so Blockbuster can continue to rely on a steady supply of new DVDs. The studios would likely be protected from any sizeable losses on payments Blockbuster might owe them at the time it files for bankruptcy. But they would lose revenue from any stores that are shut down.