Video Update's Reorganization Plan Confirmed19 Dec, 2001 By: Hive News
A judge has approved Video Update's plan of reorganization, clearing the way for Movie Gallery to acquire approximately 320 Video Update stores by the end of the week.
The confirmation from the U.S. Bankruptcy Court lets America's third largest chain expand from 1,090 stores in 31 states to 1,410 stores in 41 states and five Canadian provinces.
"We are excited about the court's approval of Video Update's plan of reorganization. The bankruptcy process for the nearly 4,000 associates of Video Update has been long and tough and we appreciate their attitude and efforts and look forward to adding them to the Movie Gallery family," said Joe Malugen, chairman and c.e.o. of Movie Gallery. "We are equally excited about our entry into Canada and several additional states in a transaction that increases our store base by approximately 30 percent and that we expect to be accretive beginning in the first quarter of next year. We currently expect the Video Update stores will add $95 million to $105 million in revenues and $10 million to $12 million in adjusted EBITDA to the Company's fiscal 2002 operating results."
In addition to the Video Update acquisition, Movie Gallery is courting Canadian chain VHQ in regards to acquiring its 48 stores under the Video Update shingle.