Jacksonville Bankruptcy News: Blockbuster in Chapter 11 Bankruptcy

Traditional video stores seem to be a thing of the past these days. As technology takes over, many Americans are choosing to watch their favorite TV shows and movies online or through the mail. It comes as no surprise that Blockbuster is in the middle of Chapter 11 bankruptcy and will most likely be bought out by satellite TV provider Dish. This marriage could lead to an interesting rival for Netflix and Redbox, which are currently dominating the movie rental market. As the television and movie watching market is increasingly linked to new technology a bigger, better Blockbuster could mean better prices for consumers and more options for viewing. Dish had the highest bid in an early April auction of Blockbuster. Several weeks later, when the deal was set to close, Blockbuster insisted Dish needed more time in order to decide which rental stores to keep and which ones to get rid of. Bankruptcy judges agreed and the revised plan provided Dish with another three months to decide on contracts and lease agreements for nearly 1,500 stores. Blockbuster's lawyer insists this will allow Dish to protect as many jobs as possible during this transition. The new agreement also means that Dish will take financial responsibility for Blockbuster's stores during the time it has to decide whether to keep or close the stores. Blockbuster went into bankruptcy at the end of 2010, citing poor sales due to competition from Netflix and Redbox. Netfilx provides its customers with unlimited movie rentals for a flat fee, while Redbox has placed vending machines for DVD rental in thousands of grocery stores and drugstores across the United States. The newest agreement with Dish will build up Blockbuster's mail in service as it determines how many stores should remain open. The new CEO of Blockbuster says nearly 30,000 jobs and billions of dollars will remain at risk while this deal is being finalized. The new deal should allow Blockbuster to emerge from Chapter 11 bankruptcy with a clean slate and restructure itself in order to be more profitable. It also gives Blockbuster the chance to compete with current competition in the video rental market. It is not just small businesses and homeowners who are struggling in the current economic climate. Huge companies that were previously very successful are finding themselves in Chapter 11 restructuring bankruptcy. Chapter 11 is most often used by huge corporations in order to restructure the company, but can be used by any business. If your business in struggling, contact a Jacksonville bankruptcy lawyer who can help you determine if bankruptcy is the best option for your company. A Jacksonville bankruptcy lawyer is qualified to help your company decide which type of bankruptcy will work for your situation. Links: Blockbuster Wins Bankruptcy Court's Final Approval to Sell Assets to Dish, by Tiffany Kary, April 26th 2011

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