As Expected, Blockbuster Files for Bankruptcy
The company filed voluntary chapter 11 petitions in the U.S. Bankruptcy Court for the Southern District of New York, Blockbuster said in a statement.
Blockbuster's franchisees and non-U.S. operations were not part of the filing, and all operations will continue business as normal.
The bankruptcy filing is part of a plan to slash the company's debt from almost $1 billion to an estimated $100 million, Blockbuster said. The company agreed the deal with a group of creditors, who committed $125 million of new financing and will exchange their bonds for shares in the newly organized company.