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Blockbuster Files Ch. 11 As Vending Competition Erodes Store Traffic

Posted On: 10/1/2010

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Blockbuster, Blockbuster bankruptcy, Redbox, Coinstar, DVD rental kiosk, movie rental vending machine, vending, vending machine, self-service machine

DALLAS -- Rumors that Blockbuster would file for bankruptcy proved to be accurate last week. The once dominant movie-rental chain has been struggling to compete in an environment where more consumers are renting movies from Redbox self-service kiosks and through subscription services like Netflix rather than through its stores. [see story]

The company filed in U.S. Bankruptcy Court in the Southern District of New York and has reportedly reached an agreement with bondholders on a recapitalization plan. A debt-reduction plan is in process to reduce debt from nearly $1.02 billion to about $100 million or less. The company assets are listed on the filing as $1.46 billion.

Blockbuster's Canadian operations remain debt free and probably will not file for bankruptcy, but may be sold off to reduce companywide debt.