Many cities may soon lose their last remaining local video stores as Blockbuster, a company that helped turn home movie renting into pastime, is preparing to file for Chapter 11 bankruptcy protection, according to reports from Bloomberg News and USA today, who were tipped by an anonymous source that is “familiar with the matter.”
The bankruptcy filing will come a month before the 25th anniversary of Blockbuster’s first store in Dallas. Many, including Maxim Group analyst John Tinker, are calling the bankruptcy of Blockbuster as the “end of an era” as companies such as Apple, Amazon, Roku and others have turned digital movie rentals into a reality.
The company is expected to be taken over by bondholders, who are being led by Carl Icahn, which has missed payments on more than $1 billion worth of debt that the company as.
The beleaguered video chain has more than 3,000 stores in the United States and had more than 402 franchises in July. Blockbuster will be able to break its leases with its franchises after filing bankruptcy.
Blockbuster Inc. is a global provider of rental and retail movie and game entertainment, with over 6,500 stores in the United States, its territories and 17 other countries as of January 3, 2010. The Company operates in two segments: Domestic and International. The Domestic segment consists of the United States store operations and by-mail subscription service operations, in addition to vending kiosks and the digital delivery of movies, through blockbuster.com and BLOCKBUSTER On Demand. The International segment consists of the non-United States store operations, including operations in Europe, Latin America, Australia, Canada, Mexico and Asia. On August 28, 2009, the Company completed the sale of Xtra-vision Limited, a 184 store entertainment retailer in Ireland to Birchhall Investments Limited.
