Movie Gallery Shares Likely Worthless Following Chapter 11 Filing

Oct.17.07 | About: Movie Gallery (MVGRQ)

Remember that item about how Netflix (NASDAQ: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.