Report: Blockbuster Eyeing September Bankruptcy Filing

By Lita Beck
|  Thursday, Aug 26, 2010  |  Updated 10:30 PM CDT
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Report: Blockbuster Eyeing September Bankruptcy Filing

AP

Blockbuster Inc. is planning to file for bankruptcy next month, according to a newspaper report.

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Blockbuster Inc. is planning to file for bankruptcy next month, according to a newspaper report.

The Los Angeles Times reported Thursday that the company met with executives at six major movie studios about its plans for a "pre-planned" bankruptcy.

The Dallas-based movie rental chain has faced stiff competition from movie-by-mail company Neflix and kiosk-rental company Redbox.

Earlier this month, Blockbuster said it agreed to a forbearance agreement with debt holders that is effective through Sept. 30. The company also reported that its second-quarter net loss widened.

According to the Los Angeles Times, the company has lost $1.1 billion since the beginning of 2008.

Blockbuster CEO Jim Keyes, restructuring consultants and senior debt holders met with 20th Century Fox, Paramount Pictures, Sony Pictures, Universal Pictures, Walt Disney Studios and Warner Bros., the newspaper reported.

The company reportedly told the studios that it wants to get out of leases for poorly performing stores and hopes to close between 500 to 800 locations.

The newspaper said that plans are not firm, but Blockbuster is looking at a mid-September bankruptcy filing. The company expects the case to last about five months, the Los Angeles Time reported.

In an interview last month after the New York Stock Exchange delisted the company's stock, Keyes said Blockbuster hasn't adapted fast enough but is trying to reinvent itself.

Get More: The Los Angeles Times

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