Posted by Blockbuster Inc. has bought itself some time with its debt holders by pushing back its debt restructuring to the end of September. With its mounting debt and gaining losses, Blockbuster is trying everything it can to recapitalize its business so that it won’t have to file for bankruptcy.
If this extension doesn’t work out, its second since coming open about its mounting debt, then the only hope is to file for bankruptcy protection. Even if Blockbuster is capable of restructuring its debt, it has warned its investors that there is a high chance of them engaging in Chapter 11 reorganization in order to keep its business from totally deteriorating.
Blockbuster Busting in Debt
While Blockbuster is still in the lead as a number one DVD rental chain, the growing popularity of Redbox and Netflix has brought it some financial pain over the years. Just this week Blockbuster reported a 20% revenue drop for the quarter that ended in July.
Even though Blockbuster recently came to an agreement with Comcast Corp. to offer video games through mail rental services, its financial outlook remains dire, and is in need of a serious overhaul in order to make up for what it’s already lost to comparable companies.
Blockbuster should just do what society wants it to and liquidate. Why the company’s creditors are being so lenient is anybody’s guess given the company’s deteriorating results.. There is no hope for a company that has insufficient funds and $1 billion in debt. Blockbuster is one of those company’s that has to be cleared from society if economic progress is to continue. This is especially true of those that work for Blockbuster. Those that treated their customers poorly will get what was coming to them and those that deserve better will get it.