DALLAS: Blockbuster consulted with Pierpont Communications this week as the entertainment chain faced media reports that it may file for bankruptcy in the near future. The news came after Blockbuster issued a regulatory filing claiming it may need to seek federal bankruptcy protection if it cannot restructure its debt, which is reportedly at $975 million, according to the report obtained by the Associated Press.
Pierpont account supervisor Randy Pruett said his team worked internally and externally, answering media questions while disseminating information to employees. The Texas-based chain has been a Pierpont client since October 2009. Blockbuster referred PRWeek to Pierpont for comment.
“After these media reports came out, we drafted an announcement for employees," Pruett said. "We sent an e-mail blast to corporate staff, and then Blockbuster's in-house team took that information and adapted it for field employees.”
Pruett said the message of the announcement was to reassure employees that Blockbuster does not have any current plans to file for bankruptcy.
“Like a lot of companies, Blockbuster is going through a transformation,” Pruett said. “This news was part of a regulatory filing and was precautionary language, describing an outcome that could happen. The media pounced on that line, but there are no actual plans to file for bankruptcy.”
Blockbuster has faced a tough year as competition from vendors like Netflix and Redbox cut into profits, and rumors circulated that the rental chain might file for Chapter 11.
Meanwhile, the March 16 filing indicated Blockbuster plans to extend its DVD kiosks program and push its DVD-by-mail service in 2010.