Hear that rattling sound? It’s coming from the chest of Blockbuster Video. A new report claims that the once-mammoth video rental chain, which admitted only months ago that bankruptcy might be in the offing, is now prepping for the harsh reality of Chapter 11 protection.
According to the Wall Street Journal, Blockbuster, which has approximately $900 million in debt, is trying to line up a $150 million debtor-in-possession loan, an indication that the company is looking for a lifeline to keep operations afloat during the whole Chapter 11 process.
In addition to this loan, the Dallas-based company is also considering swapping debt for an ownership stake in the business. Among the companies on that list is NCR, which already operates Blockbuster-branded DVD rental kiosks in retail locations.
You may remember that back in April, Blockbuster used over 400 of its retail stores in Canada as collateral in a deal that allowed them to offer new Fox and Sony DVDs at least 28 days in advance of competitors like Netflix and Redbox.
The WSJ’s source claims that Blockbuster won’t file for bankruptcy before its June 24 shareholder meeting.