Blockbuster Inc. today filed for Chapter 11 bankruptcy protection under a plan that cuts its nearly $1 billion in debt and allows it a chance to reorganize its business, The Dallas Morning News reported.
NCR Corp. quickly followed with a press release saying its Blockbuster Express DVD kiosk licensing deal would continue to operate. "NCR owns and operates nearly 7,000 kiosks throughout the U.S. under the Blockbuster Express brand, and is rapidly growing its automated retail network via kiosk locations in strong national and regional retail partners. NCR uses its own capital to develop solutions, manage and operate its kiosks and source its own movies. NCR licenses the Blockbuster Express brand," according to the release.
Dallas-based Blockbuster said all its current operations would remain open, including 3,000 company-operated stores, about 400 franchise stores, a DVD by-mail business, the kiosks and digital businesses.
The Morning News reported that Blockbuster's new owners are its senior secured debt holders, including former board member Carl Icahn, Owl Creek Asset Management, Monarch Alternative Capital, Stonehill Institutional Partners and Stonehill Master Fund and Varde Partners Inc. of Minneapolis.
About 80 percent of the company's senior secured debt holders agreed to give Blockbuster $125 million in new financing and cut its more than $900 million in debt to about $100 million.
