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|Home: BigScreen Journal - Blockbuster Goes Into Chapter 7 Liquidation - 609 Stores to Close by February 28, 2011|
Bloomberg is reporting that bankrupt video rental chain Blockbuster Inc. has agreed to be bought by its creditors for $290 million.
The group, called Cobalt Video Holdco LLC, which holds more than half of Blockbuster’s $630 million in 11.75 percent senior secured notes, made no commitment to continue the business. A provision in the agreement gives Cobalt the right to compel a conversion of the Chapter 11 reorganization case to a Chapter 7 liquidation. The contract also calls for Blockbuster to begin closing 609 stores by Feb. 28. The group can also compel a liquidation of the inventory at any stores it doesn’t elect to take.
Cobalt plans to buy all Blockbuster assets and its U.S. and international subsidiaries, according to the statement. If the plan is approved, interested bidders are required to submit binding offers within about 30 days following court approval. A final sale is expected to close no later than April 20, the company said.
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This certainly doesn't bode well for those that like to go to a local video store, but with Redbox units in so many locations and the convenience of Netflix for both discs by mail and streaming, the likelihood that we'll not see the familiar blue and yellow Blockbuster signs for much longer may not have as much sting.
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