{"id":436795,"date":"2010-03-16T16:42:00","date_gmt":"2010-03-16T20:42:00","guid":{"rendered":"http:\/\/www.businessinsider.com\/blockbuster-admits-bankruptcy-is-a-possibility-2010-3"},"modified":"2010-03-16T16:42:00","modified_gmt":"2010-03-16T20:42:00","slug":"blockbuster-admits-bankruptcy-is-a-possibility-bbi","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/436795","title":{"rendered":"Blockbuster Admits Bankruptcy Is A Possibility (BBI)"},"content":{"rendered":"<p><img decoding=\"async\" class=\"float_right\" src=\"http:\/\/static.businessinsider.com\/image\/9c37544b418dad49a4367a00\/jameskeyes-blockbuster-ceo-tbi.jpg\" border=\"0\" alt=\"jameskeyes blockbuster ceo tbi\" \/><\/p>\n<p>Blockbuster filed its <a href=\"http:\/\/sec.gov\/Archives\/edgar\/data\/1085734\/000119312510058339\/d10k.htm\">annual report to the SEC<\/a> today. In it: Language admitting that Blockbuster could go bankrupt in some situations, including as part of a stock exchange it&#8217;s planning, &#8220;or any of the other strategies we are pursuing.&#8221;<\/p>\n<p>Here&#8217;s some of the relevant sections from <a href=\"http:\/\/sec.gov\/Archives\/edgar\/data\/1085734\/000119312510058339\/d10k.htm\">Blockbuster&#8217;s 10-K<\/a>:<\/p>\n<ul>\n<li>We are in the  process of developing and initiating certain operational and business  strategies to attempt to maximize our cash and cash equivalents over the near term. One initiative we are pursuing involves  an exchange of all or part of our senior subordinated notes for Class&nbsp;A  common stock. We also may seek certain modifications to the senior  secured notes from the holders thereof. Consistent with this approach, the holders of the senior  secured notes and the senior subordinated notes have been contacted and  have formed respective note holder committees, have retained advisors  and are conducting due diligence. Assuming that we can reach agreement with such holders on the terms of  an exchange, we will seek to implement an exchange during the latter  part of the second quarter or early part of the third quarter of this  year, depending on the timing of SEC clearance of the exchange documentation and when we receive, if  necessary, shareholder approval. In connection with pursuing an  exchange, we will also be involved in discussions with holders of our  Series A convertible preferred stock regarding the possible conversion of such Series A convertible preferred stock into  our Class&nbsp;A common stock. We can give no assurance that we can  successfully execute an exchange and preferred stock conversion strategy  or any of the other strategies we are pursuing and our ability to do so could be significantly impacted by  numerous factors including changes in the economic or business  environment, financial market volatility, the performance of our  business, and the terms and conditions of our various debt agreements and indentures as well as the certificate of  designations governing our Series A convertible preferred stock. It is  possible that a successful and efficient implementation of an exchange  or any of the other strategies we are pursuing will require us to make a pre-packaged, pre-arranged or other  type of filing for protection under Chapter 11 of the U.S. Bankruptcy  Code.<\/li>\n<li>If we are unable to  successfully implement our operational and business strategies, if we  are unable to reach agreements with our debt holders to restructure a sufficient portion of our debt, or if the major  studios tighten or eliminate credit terms, we may voluntarily seek  relief under the U.S. Bankruptcy Code. <\/li>\n<li>We are currently  experiencing&nbsp;significant liquidity constraints and have&nbsp;sizable  amortization and other debt service requirements. Should&nbsp;we not be able to generate sufficient cash flow from  operations&nbsp;and&nbsp;should the studios tighten or eliminate credit terms, we  may determine that it is in the Company&rsquo;s best interests to voluntarily  seek relief through a pre-packaged, pre-arranged or other type of filing under Chapter 11 of  the U.S. Bankruptcy Code, including prior to the time we would otherwise  be required to do so in an acceleration event. Seeking relief under the  U.S. Bankruptcy Code, if such relief does not lead to a quick emergence from Chapter 11, could  materially adversely affect the relationships between us and our  existing and potential customers, employees, suppliers, partners and  others. Further, if we were unable to implement a plan of reorganization or if sufficient debtor-in-possession financing  were not available, we could be forced to liquidate under Chapter 7 of  the U.S. Bankruptcy Code.<\/li>\n<li>For the full year 2010,  we will continue to take actions to improve liquidity. We expect to  further reduce general and administrative expenses by over $200 million,  continue to rationalize the domestic store portfolio and work to divest international assets. In addition,  our 2010 global capital expenditures will remain at maintenance levels  of approximately $30 million and we will aggressively manage working  capital. We will also continue to explore a variety of strategic alternatives to strengthen our capital  structure to position us for success in our transformational efforts. We  are in the process of developing and initiating certain operational and  business strategies to attempt to maximize our cash and cash equivalents over the near term. One  initiative we are pursuing involves an exchange of all or part of our  senior subordinated notes for Class&nbsp;A common stock. We also may seek  certain modifications to the senior secured notes from the holders thereof. Consistent with this approach,  the holders of the senior secured notes and the senior subordinated  notes have been contacted and have formed respective note holder  committees, have retained advisors and are conducting due diligence. Assuming that we can reach agreement with such  holders on the terms of an exchange, we will seek to implement an exchange during the latter part of the second quarter or early part of  the third quarter of this year, depending on the timing of SEC clearance  of the exchange documentation and when we receive, if necessary, shareholder approval. In connection with pursuing an  exchange, we will also be involved in discussions with holders of our  Series A convertible preferred stock regarding the possible conversion  of such Series A convertible preferred stock into our Class&nbsp;A common stock. We can give no assurance that we  can successfully execute an exchange and preferred stock conversion  strategy or any of the other strategies we are pursuing and our ability  to do so could be significantly impacted by numerous factors including changes in the economic or  business environment, financial market volatility, the performance of  our business, and the terms and conditions of our various debt  agreements and indentures as well as the certificate of designations governing our Series A convertible preferred  stock. It is possible that a successful and efficient implementation of  an exchange or any of the other strategies we are pursuing will require  us to make a pre-packaged, pre-arranged or other type of filing for protection under Chapter 11 of  the U.S. Bankruptcy Code. See &ldquo;Liquidity and Capital Resources&rdquo; below  for further discussion of our operational plan to preserve liquidity. <\/li>\n<\/ul>\n<p><em>Via <a href=\"http:\/\/twitter.com\/bobbymacReports\/status\/10585782798\">Robert MacMillan on Twitter<\/a><\/em><\/p>\n<p><a href=\"http:\/\/www.businessinsider.com\/blockbuster-admits-bankruptcy-is-a-possibility-2010-3#comments\">Join the conversation about this story &#187;<\/a><\/p>\n<p><b>See Also:<\/b><\/p>\n<ul>\n<li><a href=\"http:\/\/www.businessinsider.com\/blockbuster-is-doomed-2010-3\">Blockbuster Is Doomed<\/a><\/li>\n<li><a href=\"http:\/\/www.businessinsider.com\/blockbuster-ceo-hallucinates-on-cnbc-that-digital-will-save-him-2010-3\">Sorry, But There&#8217;s No Way Digital Is Going To Save Blockbuster<\/a><\/li>\n<li><a href=\"http:\/\/www.businessinsider.com\/blockbuster-closes-500-stores-to-save-200-million-2010-2\">Blockbuster Collapses: Shutting Down 500 Stores In Desperate Bid To Save $200 Million<\/a><\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~r\/TheMoneyGame\/~4\/GRivDRNe2NU\" height=\"1\" width=\"1\"\/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Blockbuster filed its annual report to the SEC today. In it: Language admitting that Blockbuster could go bankrupt in some situations, including as part of a stock exchange it&#8217;s planning, &#8220;or any of the other strategies we are pursuing.&#8221; Here&#8217;s some of the relevant sections from Blockbuster&#8217;s 10-K: We are in the process of developing [&hellip;]<\/p>\n","protected":false},"author":440,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-436795","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/436795","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/440"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=436795"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/436795\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=436795"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=436795"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=436795"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}