Movie Gallery hires financial advisor
By Danny King -- Video Business,12/15/2009
DEC. 15 | PHYSICAL: Movie Gallery has hired Moelis & Co. as a financial advisor to work with its lenders after falling behind on rent for many of its stores and not filing financial statements due to its lenders on time.
The No. 2 movie-rental store chain behind Blockbuster confirmed a Financial Times report this week saying that it hired the investment bank to work with its lenders. Movie Gallery said it wasn’t behind on loan payments, as reported yesterday.
“Maintaining good relationships with the company’s lenders is very important, so Moelis’ advice will be of great value as we continue to chart a course for our business in this challenging economic environment,” Movie Gallery said in a statement today. The company didn’t comment on its rent status.
Movie Gallery is using a 30-day grace period to renegotiate with lenders and landlords after not filing financial reports required by the lenders, the Financial Times reported, citing two people familiar with the process that it didn’t identify. The company, which emerged from bankruptcy in May 2008, has about $840 million in debt, according to the FT.
Movie Gallery said in October that it would shut as many as 450 stores, or about 13% of its total, by the end of the year, citing slowing demand for packaged media such as DVDs. The company has faced growing competition from U.S. movie-rental kiosk leader Redbox and by-mail leader Netflix since emerging from bankruptcy in 2008.
The company in October set up a “real estate hotline” for its landlords that promised a 48-hour response to their inquiry, implying the chain has had trouble keeping up with its rent payments. One landlord at the time told Video Business that the chain was 20 days late paying rent to him.
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| Submitted by: | Jack Smith 1/27/2010 11:11:18 PM PT |
| Location: | Around |
| Occupation: | Store Personnel |
yeah u definitely have to check with your state labor board. In Alabama, o.t. is only paid on hours over 40, in some states it's paid on those worked over 8/day. Also, Alabama states that you get a 15 min break for every 4 hours worked and lunch time for 8 hrs I believe.
Now, I don't know if we got our movies today for next wk but I do know some didn't. With a total count of 2700 stores, what is the division of HW and MG. If we don't get our shipment is that assurance that we will close?
| Submitted by: | sick 1/27/2010 10:56:24 PM PT |
Yeah All the HV stores did, but the MG didnt... looks like we know who will be closing next week.. after they file chapter 11.
| Submitted by: | Tried and True (tandt@yahoo.com) 1/27/2010 10:16:10 PM PT |
| Location: | USA |
Anyone get movies for next week?
| Submitted by: | smittie 1/27/2010 10:06:30 PM PT |
| Location: | ca |
| Occupation: | mg employee |
In the US the rules here are similar but differ state by state. Check with your local branch of employment if you have questions. The company has to pay you for every hour you work. Don't let them beat up on us.
I for one like the 40 hours and 5 over time, i'll do my time knowing that the extra 5 hours i put in i will actually be paid for it now. But i stop at 5 hours, someone doesn't show up and i have done my time the store will be closed.
| Submitted by: | John 1/27/2010 6:34:03 PM PT |
| Location: | BC |
| Occupation: | Indie Store Owner |
Movie Gallery Canada has been cited many times for violations of the Canadian employment standards act and in some provinces have been forced to pay employees hourly rather than salary because even though they are paying someone salary the person is only obligated to work 37.5 hours per week.
Anything over that is considered over time and although you are on salary they still must pay you overtime. So if you do your 7.5 hour shift and the next person does not show up, yes anything over the 7.5 hour shift must be paid as over time.
If you have worked more than 37.5 hours and are on salary and you can prove you worked it, you can contact the local employment standards office and file a complaint, the burden of proof is on you.
Statutory holidays they must also pay you a extra pay if you worked the stat as part of your regular days work and if you didn't work it they must still pay you you regular salary for that day.
In most cases if you have the proof all you will receive is back pay for 6 months.
Each province is different however they all have very similar rules when it comes to salaried employees.
Good luck
| Submitted by: | SM for nowhere 1/27/2010 4:57:40 PM PT |
For some store managers in Canada yes they are salaried depending which province you are in, I know that I am on hourly rate in my district. We where changed to hourly due to the fact that MG was not following our employment standards. Im sorry if I confused anyone. Like I said check with your employment standards act or call your labour board and ask questions.
| Submitted by: | Movie Gallery Plans Restructuring 1/27/2010 4:49:37 PM PT |
Hollywood Video chain owner Movie Gallery Inc. is preparing to file for bankruptcy as soon as next week, according to people familiar with the matter, as the company struggles to stay alive amid big changes in how consumers watch movies and television shows.
The movie-rental chain, based in Wilsonville, Oregon, could seek Chapter 11 protection from creditors as soon as Tuesday, these people said, marking the company's second trip to bankruptcy court in just over two years. The people cautioned the filing could be delayed.
As part of the restructuring, Movie Gallery could attempt to close about two-thirds of its outlets—about 1,800 stores, these people said. That could create a significant number of layoffs, given the company currently employs 21,000.
The company previously filed for bankruptcy in October 2007, emerging in spring 2008 with private-investment firms Sopris Capital Advisors LLC and Aspen Advisors LLC as its principal owners, according to regulatory filings. The current equity holders' investments are likely to be wiped out in the bankruptcy. The owners also control large chunks of the firm's debt.
A filing would come just days after Blockbuster Inc., the U.S.'s largest movie-rental chain by outlets, lowered its earnings forecast after disappointing holiday sales.
Movie Gallery is currently negotiating with lenders over a "prearranged" bankruptcy, in which many creditors would approve a restructuring plan ahead of a filing, one of these people said. That would allow the company to go through a streamlined bankruptcy process and limit its stay in court. It also is talking with liquidation firms to help it close stores, those people said. Movie Gallery didn't respond to requests for comment.
Movie Gallery's plight shows the accelerating decline of the retail movie-rental business, which has suffered as consumer habits change. Consumers are now turning to alternatives such as Redbox, a unit of Coinstar Inc. that operates movie-vending machines in grocery stores and McDonald's Corp. outlets, and Netflix Inc., a mail-order and online rental service. They're also watching movies and television shows through on-demand cable services, mobile phones and devices such as Apple Inc.'s iPod.
Current talks center around Movie Gallery swapping a "significant" amount of debt for equity in a reorganized company, a person familiar with the situation said.
Movie Gallery's troubles began after it took on too much debt to acquire Hollywood Entertainment Corp. in 2005 for more than $800 million. The company, which no longer reports financial results, has aggressively tried to cut costs, closing about 500 stores last year. It carries about $600 million in debt today.
| Submitted by: | Truthiness 1/27/2010 4:47:13 PM PT |
| Location: | There's a party in the USA |
If that article is correct about 2/3rds of the stores closing, that's 1800 not 1000. What to believe? I would believe the WSJ over any MG management.
| Submitted by: | Doug 1/27/2010 4:29:45 PM PT |
| Location: | WA |
| Occupation: | Landlord |
Attention Landlords, give them a final demand notice to pay the rent, post a 24hr security guard at the location, when they don't pay up lock the damn doors and seize the inventory.
I did it at two locations and the 3rd is about to get the same now that the rent is 2 months behind. I offered the inventory to the staff to re-open under a new name but they could not do it, so off to the auction the inventory and shelving went.
I re-couped the back rent plus a bit of future rent. Luckily for me my Realtor was able to re-lease both locations ironically one to a indie movie store.
I also own 4 buildings which are leased to BB, they are closing one of the locations and guess what?? They actually gave us 90 days notice as per our lease agreement and we have already leased the space out.
So all you landlords that like to allow MG to lease for free, kick them out and seize all the assets before they do a midnight dash and you loose everything.
| Submitted by: | WSJ 1/27/2010 3:28:21 PM PT |
| Location: | http://online.wsj.com/article/SB10001424052748703410004575029461775496060.html |
JANUARY 27, 2010, 4:46 P.M. ET Movie Gallery Restructuring Imminent
Hollywood Video Owner Prepares a Chapter 11 Filing That Would Close About Two-Thirds of Its Rental Stores
Article Comments more in Business »
BY MIKE SPECTOR AND PETER LATTMAN
Hollywood Video chain owner Movie Gallery Inc. is preparing to file for bankruptcy as soon as next week, according to people familiar with the matter, as the company struggles to stay alive amid big changes in how consumers watch movies and television shows.
The movie-rental chain, based in Wilsonville, Oregon, could seek Chapter 11 protection from creditors as soon as Tuesday, these people said, marking the company's second trip to bankruptcy court in just over two years. The people cautioned the filing could be delayed.
wsj.com/article/SB10001424052748703410004575029461775496060.html
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