Blockbuster Makes Chapter 11 Bankruptcy Filing Official

09.23.10 | FL News Team

(New York, NY)  --  Blockbuster has filed for bankruptcy.  Early this morning, Blockbuster announced the Dallas, Texas-based company and its U.S. subsidiaries have filed voluntary Chapter 11 petitions with the U.S. Bankruptcy Court for the Southern District of New York.  Blockbuster's business model of renting videos and DVDs from brick-and-mortar stores has become increasingly obsolete as customers have grown fond of receiving their movies through downloads or via the mail, a model pioneered by a leading competitor, NetFlix.

Reaching a deal with a group of bond-holders, Blockbuster plans to reduce its debt from more than 900-million dollars down to 100-million, or even less, by exchanging debt for equity in the re-organized company. There are currently over 6,500 Blockbuster stores in the United States and 17 other countries.