Some are speculating that Blockbuster Inc., the movie and video game rental chain, may be heading to bankruptcy court amid declining revenues and a drastic drop in profit.
An article in Business Week reported that the company was more than $855 million in debt, and that annual sales fell 20% to $4.06 billion. The company has had a hard time competing with video rental kiosks, like Coinstar’s Redbox, and online and by-mail rentals from companies like Netflix.
Despite bankruptcy speculation, Blockbuster Chief Executive Officer James Keyes maintains the company will not file for bankruptcy. Instead, the company will focus on acquiring its own rental kiosks so consumers can rent videos the same day they go on sale. The company is also looking into distributing movies electronically through a video on-demand service that would be offered through the cable, satellite, or telephone company.
In addition, Blockbuster has also been working with the movie studios to reach new deals that would lower what the company pays while at the same time giving the studios a bigger cut of the revenue.
This article is proof that even the strongest and biggest companies are being hit hard in this economy. If you are a struggling business owner, a Houston bankruptcy attorney at the Malaise Law Firm can help. We can conduct a thorough review of your business’ assets and liabilities and help you work out a plan to reorganize your company’s finances. If filing for Chapter 11 is the best option for you, you can trust an attorney at our office to competently guide you through each stage of the reorganization process. If bankruptcy is not the best debt relief solution for your company, we will figure out the best way to approach your debt to get a handle on it once and for all.
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