Video rental service Blockbuster has announced it has filed for voluntary bankruptcy in the US, after admitting debts of $1.46 billion (£932 million).
It's no secret that the US-based company has been struggling to keep up with a constantly changing entertainment climate, trying to maintain a high-street presence while building up its online business, but it is still a shock to see such a high-profile company file for Chapter 11.
While it has been adapting to life on the web, the likes of Netflix in the US and LoveFilm in the UK were already established in the online market.
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Although it has voluntarily gone to the courts because of its debts, non-US Blockbuster outlets are said to be not affected as they are separate entities.
In the bankruptcy filing, Blockbuster revealed it has $102 billion in assets, compared to $1.46 billion of debt but it is hopeful that it can still do business, with Chief Executive Officer Jim Keyes explaining: "This provides the optimal path for recapitalising our balance sheet and positioning Blockbuster for the future, as we continue to transform our business model to meet the evolving preferences of our customers."
As the company has secured a $125 million loan to finance current operations, BlockBuster is hoping to come out of the bankruptcy with no debts, except for this loan.