Blockbuster, the movie-rental company giant, has filed for Chapter 11 bankruptcy. The move allows the company to secure $125 million in debtor-in-possession financing to help keep operations stable while the reorganization takes place.
In the Thursday announcement company spokesmen also claimed that the company’s financial advisors has devised a recapitalization plan that will allow the company to reduce its debt from $1 billion to $100 million or less.
Management has stated that customers will not feel the impact of the reorganization and that stores will remain open.
“We determined that (bankruptcy) provides the optimal path for recapitalizing our balance sheet and positioning Blockbuster for the future as we continue to transform our business model to meet the evolving preferences of our customers.” Jim Keyes, chairman and CEO of Blockbuster, said in a statement Thursday.