Movie Gallery Shares Likely Worthless Following Chapter 11 Filing

Remember that item about how Netflix (NFLX) and Blockbuster (BBI) stand to benefit when Movie Gallery (MOVI) files Chapter 11 and starts shutting down stores? Well, as it happens, Movie Gallery filed Chapter 11 Tuesday, in a pre-packaged reorganization plan lead by Sopris Capital Advisors.

Under the plan, existing MOVI shares would be wiped out; existing equity holders would “under certain circumstances” end up with 2% of the company’s equity. No details in the announcement about store closing plans, although it does say that customers should not be affected by the filing.