DOTHAN, Ala. (AP) - Movie Gallery, the nation's second-largest video rental chain, plans to emerge from Chapter 11 bankruptcy protection in the second quarter of this year under a restructuring approved by a federal bankruptcy judge in Virginia.
The plan provides the Dothan-based company with $100 million, plus $25 million in letters of credit, cancels existing shares of its common stock and converts more than $400 million in debt into new equity.
It also provides for the issuance of new stock and creates a new board of directors.
Movie Gallery, which says it operates nearly 3,500 stores in all 50 states, announced earlier this week that it will close 160 more stores in a third and final round of closings. It already had closed 920 stores in the past year.
The company's financial troubles began after it acquired Hollywood Video in early 2005.
A spokeswoman said Movie Gallery plans to keep its corporate office in Dothan and has not made any decision with regard to staff reduction.
(Copyright 2008 by The Associated Press. All Rights Reserved.)
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