Friday, September 24, 2010;
Blockbuster filed for Chapter 11 bankruptcy protection Thursday, reeling from mounting losses, rising debt and competitors that have better catered to Americans' evolving media habits.
The company will continue to operate its 3,300 U.S. stores, although analysts expect hundreds of them to close under new owners led by billionaire investor Carl Icahn.
Dallas-based Blockbuster has about 25,500 employees, including 7,500 full-time workers.
The bankruptcy marks the end of an era that Blockbuster and its blue-and-gold torn-ticket logo helped establish. Americans who once trooped to video-rental stores now watch movies from DVD-by-mail services such as Netflix, cable video on demand and Redbox vending machines.
The bankruptcy will wipe out Blockbuster's battered stock, which was delisted from the New York Stock Exchange in July because it was nearly worthless.
Icahn and his group own 80 percent of top-priority Blockbuster debt, with a face value of $675 million. Under the proposed reorganization, they will get new shares and control of Blockbuster's board in return for forgiving the debt.
This marks the second time that Icahn has tried to turn around Blockbuster. He pushed Blockbuster to build up its DVD-by-mail service after acquiring a 10 percent stake in the company in 2005, only to see the chain get into deeper trouble.
- Associated Press
l Verizon Wireless plans tiered pricing: Verizon Wireless, the largest U.S. mobile carrier, will introduce tiered pricing in the next four to six months to take advantage of the growth in data traffic. The company will add in the new pricing as it rolls out as it rolls out its faster, fourth-generation network, Verizon Communications chief executive Ivan Seidenberg said at an investor conference Thursday.
Verizon's 4G network has been set up in 30 markets since June, Seidenberg said. The wireless company will make the service available to customers this year. Tiered plans typically offer an array of price options for different network usage and eliminate unlimited packages. AT&T, the second-largest mobile carrier, introduced tiered plans this year for its 3G network.
l Petrobras holds record stock offering: Brazilian state oil company Petrobras raised $70 billion Thursday in the world's biggest share offering, giving the company the financial muscle it needs to tap vast offshore oil reserves. The Rio de Janeiro-based company sold 1.87 billion new preferred shares at 26.30 reais each, the company said in a regulatory filing. It sold 2.4 billion new common shares at 29.65 reais each. The cash will help fund the oil exploration plans aimed at turning Brazil into a major energy exporter.
l GM vows to meet production goals: General Motors told the government that it will seek to be within 90 percent of its U.S. manufacturing targets through 2014. The automaker made the commitment in a letter to the Treasury Department that was included in a regulatory filing Thursday. GM has been 61 percent-owned by the U.S. government since exiting bankruptcy in July 2009. It filed for an initial public offering last month that would let the government sell some of its stake. The automaker's projected manufacturing levels are 1.8 million vehicles for 2010, 1.93 million for 2011, 1.998 million for 2012, 2.16 million for 2013, and 2.26 million for 2014.
- From news services