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Last updated 2:22AM ET
March 5, 2021
Movie Gallery Bankruptcy Will Take Months
(APR - Alabama Public Radio ) - Dothan-based Movie Gallery's bankruptcy reorganization will take months longer to complete than the company initially expected.

The movie-rental company on Wednesday won final court approval to borrow $150 million to finance its Chapter 11 reorganization. A judge also cleared the way for the company to proceed with a $50 million stock-rights offering backed by a private equity firm.

But its Chapter 11 plan will not be delivered to the U.S. Bankruptcy Court in Richmond, Virginia, by the mid-November deadline. A Movie Gallery spokesman said that plan won't be filed before November 27th.

Movie Gallery doesn't expect to exit bankruptcy protection before the second quarter of 2008.

The company began its bankruptcy reorganization on October 16th under a pre-negotiated deal with creditors.

Movie Gallery has dealt with several obstacles. The company's proposal for shutting down more than 500 stores and auctioning leases encountered opposition from shopping-center owners across the country. It has also been at odds with its creditors committee.

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