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Blockbuster wins more time to file Chapter 11 plan

Fri, 01/21/2011 - 7:00am
The Associated Press

NEW YORK (AP) – Blockbuster Inc. is getting more time to file a reorganization plan under Chapter 11 proceedings.

The troubled movie rental company, which filed for bankruptcy protection in September, now has until March 21 to file the plan and until May 20 to round up enough votes among its creditors for approval. That's pushed back from a previous deadline of today for filing the plan and March 21 for getting the votes.

Judge Burton R. Lifland of U.S. Bankruptcy Court in Manhattan granted the extension Wednesday.

It won't be the company's last challenge. Blockbuster, which hopes to cut its debts in court to about $100 million from almost $1 billion, is also in the hunt for a new CEO to lead a turnaround effort.

Once the dominant movie rental company in the U.S., the Dallas company has been struggling with mounting losses for years as Netflix Inc., cable video-on-demand and DVD rental kiosks stole business. It has tried to adapt to new ways of delivering movies to consumers but hasn't been able to catch up with rivals.

In December, the chain said it planned to close 182 stores in the next few months. It has closed more than 1,000 underperforming stores in the past two years. The company was down to 3,000 locations when it entered bankruptcy protection, but analysts anticipated hundreds more stores will eventually shut their doors as Blockbuster changes focus.

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