Home > attorneys > Will Blockbuster Be filling Bankruptcy?

Will Blockbuster Be filling Bankruptcy?

Should Blockbuster be looking for a bankruptcy lawyer?  Movie Gallery, who is the No. 2 DVD rental chain and owner of Hollywood Video and Game Crazy, reported $70.7 million net loss for a one month period.  This is according to regulatory filing.  After 25 years of providing us with home entertainment Movie gallery informed stores across the nation on April 30th that operations would come to an end this month.  This is after their second time filling bankruptcy earlier this year on Feb. 3rd.  In spite of increasing margins on rentals, the Gallery couldn’t seem to acquire enough to cover their $151 million in operational costs.   The actual stores, general and administrative and amortization make up most of these costs.  Movie Gallery actually closed all of its 2,415 stores and liquidated their inventory.  Movie Galleries Hollywood Video and Game Crazy brands are to follow in closing in the future.

All eyes are on Blockbuster and whether they will follow suit of Movie gallery or will they survive by implementing their new tactics and leverage the fact that they have lost their brick and mortar competitors.  This leaves Blockbuster in the ring with big boys like NetFlix to fight over Movie Galleries abandoned customers.  Blockbuster does have advantage of time on their side.  Hardcore movie fans who want to view their movies as soon as possible can turn to Blockbuster in order to avoid some titles that are delayed by Netflix.

Blockbuster is on the verge of bankruptcy.  If they are unable to restructure their debts, it is unlikely they will survive.  But if they can fight with new strategies they will be left to pick up some of the scraps that Movie Gallery has left behind.  Do you think blockbuster will be able to weather the storm?  What strategies would you try to implement to save the last of the DVD brick and mortar dinosours?

  1. Dan
    May 10, 2010 at 1:35 pm

    Bankruptcy is by no means a get out of jail free card. Going into debt is a serious matter and filing for bankruptcy in Maryland could require legal attention. Reaching an experienced attorney in the field of bankruptcy could end up saving you much more money while making it easier to go through the process.

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