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Business News Retail
Blockbuster US to file for bankruptcy protection
By CMU Editorial | Published on Thursday 23 September 2010
Worrying news from the world of entertainment retail, though more for the film industry than the music sector, I suppose. And more for the Americans than us Brits.
The US-based Blockbuster video rental chain is expected to apply for Chapter 11 bankruptcy protection this week amid mounting debts and flagging fortunes. According to the Wall Street Journal, all is not lost, though the deal on the table is that smaller shareholders lose their equity so that the company’s biggest money lenders can take a stake in lieu of unpaid debts.
Blockbuster has, of course, been facing an uncertain future ever since the rise of online mail-order DVD rental rivals, and with the prospect of video-on-demand services going mainstream. The company also blames the rise of online movie piracy for its current woes.
The UK version of Blockbuster, which has dabbled in CD sales in recent years, is no longer formally linked to the US firm, so shouldn’t be affected by its former American parent company’s current problems.
