Chapter 11 bankruptcy does not mean liquidation and ceasing to exist.
That would be Chapter 7.
The debt holders will take a big hit and a lot of stores will close but they are not finished yet.
Blockbuster plots new strategy in bankruptcy
For now, Blockbuster intends to continue operating its remaining 3,300 US stores under Chapter 11 protection, although analysts expect hundreds of them to close under new owners led by billionaire investor Carl Icahn, who refused comment yesterday.
That will probably mean mass layoffs among Blockbuster’s 25,500 employees, including 7,500 full-time workers.
Blockbuster, founded 25 years ago in Dallas, is looking to reduce its debt from nearly $1 billion to about $100 million under a reorganization plan that it hopes to get approved by early next year.
Blockbuster plans to build upon its recent efforts to rent videos through the mail and over high-speed Internet connections, just as Netflix does. It also stamped its brand on 6,600 kiosks.
