Report: Blockbuster Prepping for Sale

Dallas based rental chain would be bought out for less than $300 million

Last Updated: February 11, 2011 @ 10:33 AM

Blockbuster's creditors are preparing to sell the rental chain, according to a Wall Street Journal report.

The company's investors reportedly could not agree on a plan to take the company out of bankruptcy. They are willing to sell Blockbuster for $300 million. 

To put that price tag in perspective, it's quite a fall for a company that was purchased by Viacom for $8.4 billion in 1994.

Among those reportedly looking to buy the Dallas-based company are Carl Icahn and Monarch Alternative Capital. Icahn had at one point been a major shareholder in Blockbuster and was a major part of the consortium of investors lending the chain $175 million to keep the company operating while it goes through bankruptcy.

A spokesperson for Blockbuster and for Icahn did not immediately respond to TheWrap's request for comment. 

Blockbuster labored under nearly $1 billion in debt for the past year. It filed for Chapter 11 protections last fall, pledging to shutter stores and refocus its efforts on digital distributions and kiosks. However, the company has missed several deadlines to file a reorganization plans.

At the same time, it is being sued by Summit Entertainment, which claims that the chain owes it $9.5 million for Blu-rays and DVDs that it ordered after it went into Chapter 11. Summit wants the court to force the company to liquidate or pay its bills.