Report: Blockbuster reorganization a bust, so firm now desperately seeks buyers

Video-rental company Blockbuster, which has been struggling to craft a strategy to emerge from bankruptcy for months, reportedly has decided to put itself up for sale after creditors balked at putting up more cash to continue operations.

The company could seek a judge's approval of a sale as early as next week, reports the Wall Street Journal. The sale could bring in as much as $300 million, the paper said.

The company, has been unable to convince creditors to fund a fight against Netflix and upstart Redbox, and faces mounting pressure as companies like Amazon, Apple, Vudu and others continue to bulk up their own video streaming and rental initiatives.

Creditors agreed to give Blockbuster $130 million late last year to help it through the holiday season, but disappointing sales quickly had the company asking for more. The 25-year-old company has closed many of its retail outlets and had plans to close more this year. It filed for bankruptcy Sept. 23, but has missed deadlines for filing a reorganization plan several times. The company listed assets of $1.02 billion and debt of $1.46 billion when it sought court protection.

One major creditor, film distributor Summit Entertainment, in a Feb. 3 court filing said it's owed $9.5 million and hasn't been paid by the company; it wants Blockbuster to be quickly liquidated.

Blockbuster last reported a profit in the first quarter of 2009. It had a net loss of $53.5 million on sales of $736.6 million in the third quarter of 2010.

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