Blockbuster, the movie rental chain, is said to be readying a bankruptcy filing for mid-September, The Los Angeles Times reported on Thursday, citing people briefed on the matter.

Blockbuster’s bottom line has suffered over the last several years as the rental movie marketplace has seen the rise of such competitors as Netflix and Redbox.

The firm’s C.E.O., Jim Keyes, and the company’s senior debt holders and a restructuring team reportedly informed executives at the major film studios in Hollywood last week of Blockbuster’s intention to enter a pre-planned bankruptcy near the middle of next month.

Blockbuster needs to keep the studios on its good side so as not to interrupt the supply of new DVDs during a restructuring.

The Chapter 11 period would be used to restructure nearly $1 billion in debt as well as to get out of leases on 500 or more of its American local outlets, the newspaper said.

Source

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