Blockbuster bankruptcy highlights dangers to investors of obsolete business models
The filing for bankruptcy protection by the US video rentals firm Blockbuster is a stark reminder of how technological and cultural changes can hit business models.
On September 23, the once-thriving US video (and latterly DVD) rental chain Blockbuster Inc. filed for voluntary Chapter 11 protection with the US Bankruptcy Court for the Southern District of New York. The move will allow Blockbuster to restructure its business, helping it to recapitalise its balance sheet and reduce its debts from almost $1 billion to $100 million.
As part of the restructuring, investors in $675 million worth of 11.375% senior secured notes, due to mature in 2014, will see
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