Troubled video rental giant Blockbuster is asking its bondholders for $200 to $250 million to aid in its exit from Chapter 11 bankruptcy. Blockbuster, which filed for bankruptcy protection in September (see “Blockbuster Files Chapter 11”), recently asked for a third extension in order to file its reorganization plan (see “Blockbuster Asks for Third Extension”) with the bankruptcy court.

 

According to The Wall Street Journal, Blockbuster’s plan is to eliminate nearly $1 billion in debt by turning over control to the holders of its secured bonds. But after a weaker than expected holiday season, the management of the troubled video chain decided that it needed more funds to accomplish its turnaround and get out bankruptcy. 

 

The Journal is reporting that the bondholders have not yet decided whether to provide the funds or to attempt to sell the company. According to the Journal, Blockbuster could realize about $400 million at auction “based on the value of it senior bonds, inventory, and real estate.”