By : Erik Gruenwedel | Posted: 24 Feb 2010
Just hours before it released fourth-quarter financial results, Blockbuster said it had engaged legal and financial experts to help the Dallas-based No. 1 DVD rental company restructure nearly $1 billion in debt.
Blockbuster, which is ambitiously staking its future on a multiplatform distribution strategy involving by-mail, kiosk, electronic, mobile phone and its shrinking store base, has been hamstrung by hundreds of millions in debt — the majority of which it inherited after being spun off by Viacom in 2004.
The company said it retained law firm Weil, Gotshal & Manges and investment bank Rothschild to explore restructuring its massive debt into equity and reworking loan agreements.
In addition, Blockbuster said it had engaged in talks with bankrupt Movie Gallery, parent of Hollywood Video, regarding acquiring unnamed assets.