After struggling against newer competitors such as Netflix and Redbox, Blockbuster is preparing to enter a "pre-planned" bankruptcy next month, the Los Angeles Times’ Company Town blog reports.
The goal would be for Blockbuster to restructure its almost $1 billion in debt and shutter between 500 to 800 of its more than 3,400 U.S. stores.
Blockbuster presented the plan to 20th Century Fox, Paramount Pictures, Sony Pictures, Universal Pictures, Walt Disney Studios and Warner Bros. because the home-video rental chain will need the studios’ support to ensure it can rely on an uninterrupted flow of new DVD releases after filing for bankruptcy, the article says.
The company’s executives and senior debt holders met with the six top movie studios to alert them to the plan, the story says. While it’s not definite that Blockbuster will enter bankruptcy protection, executives presented the plan as the most likely outcome, the article adds.
A Blockbuster spokeswoman declined to comment on the meetings with studios, according to the story.