Blockbuster went bankrupt

New York, September 23, 2010

Blockbuster, American chain of video stores, filed for bankruptcy today. It had a debt that exceeded $ 400 million of its assets and two months ago it had stopped trading on the NYSE.

The network executive director, Jim Keyes, presented a document to the Bankruptcy Court which specifies that “after careful and thorough analysis, we determined that the process announced today is the optimal way to recapitalize our balance sheet for the future, as we work to transform our business model and meet the changing preferences of our customers.”

In this way, Blockbuster seeks to reach an agreement with bondholders to reduce its debt of U.S. $ 1,460 million by 90%, bringing it to just over 100 million.

The video rental company has assets valued at U.S. $ 1,020 million and plans to reduce its number of stores drastically to shovel the internal crisis it faces.

Piracy had seriously affected Blockbuster, which had been forced to close hundreds of stores and in recent years.