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Blockbuster to Hollywood Studios: We're Bankrupt
Photo by TheTruthAbout... via Flickr
It probably won't come us a surprise to many that Blockbuster, once the market leader in home video rentals, is preparing to file for bankruptcy. "Executives from Blockbuster and its senior debt holders last week held meetings with the six major movie studios to discuss their intention to enter a 'pre-planned' bankruptcy in mid-September, said several people familiar with the situation who requested anonymity due to the sensitivity of ongoing talks," reports the LA Times.$1.1 billion in losses have been logged since 2008 for Blockbuster, who have been treading water and losing steam against home delivery and streaming options, like those offered by Netflix.
The impact of Blockbuster's Chapter 11 filing is important to Los Angeles, since this is where the major movie studios make their home. Though they have not officially announced the bankruptcy filing, the plan seems the most likely, and would take about five months, during which time the company would "restructure a crippling debt load of nearly $1 billion and escape leases on 500 or more of it 3,425 stores in the U.S." They'll need the help of businesses like Paramount, Warner Bros., Sony and the like, so "Blockbuster can continue to rely upon an uninterrupted supply of new DVDs" while they're in Chapter 11.
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