Blockbuster eyeballs bankruptcy
Even though Blockbuster is sinking in $900 million in debt, the company is trying to acquire a $150 million debtor-in-possession loan. This means that Blockbuster wants to continue operating during the upcoming chapter 11 bankruptcy. Debt swaps, license agreements, and selling some oversees operations to increase its current cash holdings of approximately $109.9 million will keep the Blockbuster brand running during difficult times.
Expect more store closings as Blockbuster cuts cost and identifies unprofitable operations. Its online service will continue, allowing customers to rent as usual. Chapter 11 bankruptcy provides a rebound for cash-strapped companies. The question is if Blockbuster will come back strong with a winning strategy to beat out competition. Don't sit at the edge of your seat, however. With the widespread changes in how movies and video are distributed, the old model of a brick-and mortar video rental store may simply be gone with the wind.