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.
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.
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