Blockbuster Inc. (PINK:BLOKA) stock has been showing enhanced volume and price action after the company got bankruptcy court’s approval to borrow $25 million.
Previously a successful movie and video game rental business, Blockbuster is now engaged in bankruptcy proceedings after the company filed for Chapter 11 protection on September 3, 2010. Heavy indebted, the corporation will have to deal with $1.46 billion in liabilities, but the struggling firm desperately needs more cash. The only loan guaranteed to them is the $125 million totaling debtor-in-possession financing agreements with senior noteholders.
According to the latest headlines, Blockbuster will try to pay $40.4 million to various studios to keep up the supply of movies and games, as the company still tries to run a business alongside the bankruptcy proceedings.[BANNER]
The court approved Blockbuster to draw $25 million from the $125 million loan basket. Discussion on the remainder of the offered loan will be continued in October when another court session takes place.
The entertainment business saw it’s peek in 2003 and seized growing afterwards. Wide discussions are taking place as one of the largest and best known movie rental business is about to step down. Arguably brought into submission by main competitors – Netflix, Inc. (NASDAQ:NFLX) and Coinstar, Inc. (NASDAQ:CSTR), the giant network of stores does not appear ready to liquidate their brick and mortar centers, even though going into the virtual business would be the easiest way around.
