Updated: A Blockbuster spokesperson tells the Dallas Observer that it “does not intend to file for bankruptcy.”
…and that it has hired Kirkland and Ellis only “for assistance with ongoing financing and capital-raising initiatives. We’ve been talking about refinancing. We’ve also said our business generates cash, and if we needed to we could put a self-funding plan in place through 2009. We could self-fund our business. We would reduce spending and cash flow so we don’t need outside assistance, but we hope that’s not necessary. We’re hopeful to have refinancing in place.”
Earlier: Blockbuster (BBI) shares are down 78% to $0.22 on a report that the troubled movie rental chain has hired a lawyer to explore a possible bankrupcy filing.
Bloomberg reports that Blockbuster has hired Kirkland & Ellis to “evaluate restructuring options,” which could include bankruptcy.
Blockbuster has 7,500 stores, but has struggled to compete with online DVD rental services like Netflix (NFLX), kiosk companies like Redbox, etc.
Last year, Blockbuster tried to buy Circuit City for more than $1 billion. Circuit City, of course, started its bankruptcy liquidation process this past January.