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Blockbuster seeks bankruptcy advice as shares are suspended

Rental giant considers reorganisation options following tightening of credit

US retail and rental giant Blockbuster is seeking advice on bankruptcy following the New York Stock Exchange's decision to suspend trading.

According to a report by Bloomberg, bankruptcy specialist Kirkland & Ellis is looking into options which may include "pre-arranged bankruptcy," where restructuring work is completed out of court.

"We’ve hired them for refinancing and capital raising initiatives," Karen Raskopf, a Blockbuster spokeswoman, told Bloomberg. "We do not intend to file for bankruptcy."

The company had planned to fund its own operations throughout 2009 after two credit facilities expire this August, said Raskopf.

Shares in the firm dropped as much as 86 per cent yesterday before the NYSE halted trading.

Blockbuster has more than 7500 stores in the US, Europe, Australia and Asia. The company offers movie and videogame rentals, and has faced increasing competition with the growth of web-based services such as Netflix.

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Matt Martin avatar

Matt Martin


Matt Martin joined GamesIndustry in 2006 and was made editor of the site in 2008. With over ten years experience in journalism, he has written for multiple trade, consumer, contract and business-to-business publications in the games, retail and technology sectors.