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Blockbuster Files for Chapter 11 Bankruptcy in New York City

|Includes: Blockbuster Inc. (BBI), BBI.B, BLOKA
Early this morning, Blockbuster Inc. filed for chapter 11 bankruptcy protection in the federal bankruptcy court in New York City, as had been widely predicted. Under the terms of a pre-negotiated plan support agreement with holders of a majority of Blockbuster's Senior Secured Notes, Blockbuster intends to propose a plan of reorganization which will, according to the company, "substantially delever Blockbuster, . . . afford Blockbuster access to new capital and liquidity, . . . maximize value and assure Blockbuster’s long-term viability." Under the terms of the plan support agreement, Blockbuster will convert all of the Senior Secured Notes into equity of the reorganized Blockbuster.

Blockbuster asserts in court filings that it has an opportunity to reorganize successfully by pursuing a long-term strategy based upon Blockbuster differentiating "itself as the only operator that provides access across multiple delivery channels, providing unrivaled convenience, service, and value to its customers." A key element of the strategy will be the development of "new opportunities and partnerships in the digital space, taking advantage of the widely recognized Blockbuster brand name and its exceptional library of 125,000 titles to expand its reach to new customer groups."

As a courtesy to our followers, we have made several of Blockbuster's major first day bankruptcy court filings available through JD Supra:

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