Blockbuster told Hollywood studios that it’s planning to file for bankruptcy in mid-September.

The home video rental retail chain wants to use the time to restructure its $1 billion debt and get out of the leases on at least 500 of the crappiest-performing of its 3,424 stores.

They think they can turn things around by doing more with its Redbox-style DVD kiosks and increasing their attention on this crazy new-fangled thing called the “Internet.”

Blockbuster’s stock was delisted from the NYSE last month. It closed Thursday at $0.11.

Blockbuster tells Hollywood studios it’s preparing for mid-September bankruptcy [LAT via Movieline]

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