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Blockbuster denies bankruptcy speculation

USA: In the latest sign of retail trouble, Blockbuster said Tuesday, 3 March 2009, it has brought in an outside law firm to rescue the long-slumping video store chain from a financial bind.

By Michael Liedtke

5 Mar 2009

The hiring of corporate restructuring specialists Kirkland & Ellis spurred speculation that Blockbuster is on the verge of becoming the latest merchant to be waylaid by the worst recession since the early 1980s.

But Blockbuster spokesperson Karen Raskopf said the Dallas-based company has no plans to seek bankruptcy protection, refuting media reports that quoted unnamed people saying Kirkland & Ellis was exploring a possible bankruptcy filing.

The rebuttal reversed a steep decline in Blockbuster shares. The shares recovered 13 US cents to 35 cents in Tuesday's extended electronic trading, after plunging 74 cents to finish the regular session at 22 cents.

Read the full article here.