Forum and wire reports, Published May 12 2010
Moorhead Hollywood Video closingThe Hollywood Video store in Moorhead is closing as part of a bankruptcy filing by its parent company, Movie Gallery Inc.
Movie Gallery plans to close its remaining stores and liquidate as consumers increasingly receive movies through the mail, vending machines and high-speed Internet connections, according to The Associated Press.
The Moorhead store has not yet received information on a store closing sale, but the store is expected to close in a couple of months, according an employee who answered the phone there.
No one answered the company’s media information line, and it was not possible to leave a message.
The No. 2 rental chain behind Blockbuster Inc. filed a notice with the U.S. Bankruptcy Court for the Eastern District of Virginia in Richmond late last week that it will terminate its business operations after defaulting on a loan from one of its creditors.
An agreement filed with the court stated that the move to close more than 1,900 remaining stores is in the “best interests” of the company and its creditors. The agreement does not specify a time line and must be approved by a bankruptcy judge.
Movie Gallery, based in Wilsonville, Ore., filed for reorganization under Chapter 11 bankruptcy in February, according to the company’s website. The filing does not include Movie Gallery’s Canadian operations.
Over the past two years, Movie Gallery closed several hundred underperforming stores across the country.
The February filing was the Movie Gallery’s second bankruptcy filing.
The first was in October 2007, when the company was unable to sustain the debt it took on in its $850 million acquisition of rival Hollywood Entertainment Corp. in 2005. Movie Gallery agreed to assume about $350 million of Hollywood Entertainment’s debt as a part of the deal.
Movie Gallery said it continued to see “significant” losses in 2009. Annual revenue fell $546.3 million, or 28 percent, to $1.4 billion.