Updated: Blockbuster Seeks Bankruptcy Advice, Report Says; Company Denies It
Updated: Blockbuster spokeswoman Karen Raskopf denied the claim, acknowledging that they’d hired the firm for refinancing—not bankruptcy (via Bloomberg).
Blockbuster hasn’t released its Q408 numbers yet—but with reports that the company has retained legal counsel for a potential bankruptcy filing, there’s no need to wait until then to know that its losses have continued to mount. Bloomberg reports that Blockbuster (NYSE: BBI) hired Kirkland & Ellis, LLP to help evaluate a number of restructuring options; though neither party would confirm, the news sent Blockbuster’s stock down by as much as 86 percent before trading was halted. Rival Netflix’s shares were up more than 6 percent.
Blockbuster has a heavy debt load and has done everything, including trying to renegotiate lease prices for about a third of its stores, to help cut some of it down. It has also tried lowering rental prices of some movies to 99 cents, beefing up its mail-order service with games, and even launched a streaming video player to lure consumers back from competitors like Netflix (NSDQ: NFLX) and Redbox. But clearly, it hasn’t been enough. Then, there was Blockbuster’s failed bid to buy out Circuit City last year—wonder if there’s a buyer left out there with pockets deep enough to get the movie retailer out of its own hole.
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