Movie Gallery Plans Chapter 11 Filing

DOTHAN, Ala. — Video rental giant Movie Gallery plans to file for Chapter 11 bankruptcy protection this month and looks ahead to restructure its finances in a pre-negotiated deal with key creditors.

The Dothan, Ala., company, which rents adult titles, hopes to emerge from Chapter 11 in early 2008, according to the Wall Street Journal, whose sources spoke on condition that they not be identified.

The company hasn't publicly acknowledged the possibility of the Chaper 11 filing, but a growing number of financial analysts have predicted it.

Movie Gallery, which operates more than 4,600 video rental stores in the U.S., Canada and Mexico, has been facing performance issues since acquiring competitor Hollywood Entertainment in 2005.

Sluggish rental trends have made it difficult for the company to stay current on its required debt payments.

In July, when it said it had $1.2 billion in debt, Movie Gallery failed to comply with terms of a senior loan, leading to speculation of a potential Chapter 11 filing. Since then, the company has looked to preserve cash and tried to negotiate with its lenders a financial restructuring to solve its debt troubles.

Earlier this month, Movie Gallery said it would close about 520 underperforming Movie Gallery and Hollywood Video stores. Prior to that, the company delayed the planned launch of a DVD-by-mail subscription service.

Under the plan that includes the bankruptcy filing, Movie Gallery would convert its bonds to stock, and a portion of its second-lien debt also will be converted to stock.

Related:  

Copyright © 2025 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

AEBN Publishes Popular Searches for November, December

AEBN has released the top search terms for the months of November and December from its straight and gay theaters in all 50 states and the District of Columbia.

Professor Fired Over Adult Content Sues U Wisconsin

Veteran communications professor Joe Gow this week filed a civil lawsuit against the University of Wisconsin board of regents for violating his First Amendment rights by firing him for creating and appearing in adult content.

Teasy Agency Launches 'WannaCollab' Networking Platform

Teasy Agency launched a new networking platform, WannaCollab, at the X3 Expo earlier this month.

Ofcom to Hold Online Sessions on OSA Compliance

U.K. communications regulator Ofcom will hold an online conference Feb. 3-5, titled “The Online Safety Act Explained: How to Comply,” explaining new duties and deadlines required of adult businesses to implement age assurance under the Online Safety Act (OSA).

FSC Announces Support for North Dakota Age Verification Bill

Free Speech Coalition (FSC) has announced its support for SB 2380, North Dakota's new age verification bill.

Oklahoma State Senator Introduces Bill to Criminalize All Porn, Jail Creators

Oklahoma Senator Dusty Deevers has introduced a bill that would criminalize all adult content and authorize the state to imprison those who create or view it.

Adult Time Releases 2024 'Year in Review' Report

Adult Time has released its Year in Review report, highlighting the studio's audience favorites from throughout 2024.

AEBN Reveals Ariel Demure as Top Trans Star for Q4 of 2024

AEBN has named its top trans stars for the fourth quarter of 2024, with Ariel Demure landing atop the leaderboard.

WOWify.AI Joins ASACP as Corporate Sponsor

WOWify.AI has signed on as the latest corporate sponsor for the Association of Sites Advocating Child Protection (ASACP).

Segpay Adds Gateway Payment Solution

Segpay has added the Gateway option to its direct payments solutions.

Show More