Blockbuster soon to file for Chapter 11 bankruptcy protection, according to reports

Report: Blockbuster Ch. 11 filing likely soon

NEW YORK — Troubled video-rental chain Blockbuster Inc. is planning to file for Chapter 11 reorganization any day now, according to published reports.

Citing sources with knowledge of the situation that it did not name, the Wall Street Journal says Blockbuster is working with creditors to develop a restructuring plan that would free it of debt, allow it to keep some stores open and focus more on digital distribution.

The Journal reports billionaire investor Carl Icahn owns one-third of Blockbuster’s debt and would return to the company’s board once it exits Chapter 11.

Blockbuster and Icahn did not return calls for comment.

Once a home entertainment powerhouse, Blockbuster, based in Dallas, has been losing business for years as more movie lovers switch to subscription services like Netflix.