Blockbuster has filed for Chapter 11 bankruptcy in the US as the company tries to manage approximately $1.4bn in debt and the challenge of nimble rivals like Netflix and Coinstar’s Redbox.
The company owns roughly $1bn in assets and will keep its 3,000 stores open in the US during the reorganisation process. Creditors include content suppliers like Fox, Warner Bros and Universal, as well as the Bank Of New York Mellon.
Carl Icahn owns roughly one-third of the company’s stock and will play a key role in the process.
“After a careful and thorough analysis, we determined that the process announced today provides the optimal path for recapitalising our balance sheet and positioning Blockbuster for the future as we continue to transform our business model,” CEO Jim Keyes said.
Blockbuster was founded in 1985.