News out of New York is that Columbia House has retained bankruptcy attorneys to file a Chapter 11 bankruptcy. Chapter 11 is a reorganization and restructuring of debts similar to Chapter 13 bankruptcy
The debtor’s bankruptcy attorney will prepare a repayment plan and submit it to the bankruptcy court and its creditors for approval.
If approved, the reorganization bankruptcy will prevent creditors from attempting to seize the debtor’s assets. The bankruptcy attorneys can additionally draft plans to modify interest rates and repay only the value of collateral to secured creditors.
Columbia House, the mail-order music retailer that turned an “Eight CDs for a penny” offer into an annual profit of $1.4 billion at its peak, has filed for bankruptcy. Filmed Entertainment Inc., the parent company for Columbia House, filed for Chapter 11 bankruptcy protection in New York Monday, citing the ever-changing digital and online landscape that continue to erode at the physical medium’s sales, the Wall Street Journal reports.
Columbia House, whose thin cardboard ads for their unique one-penny offers populated nearly every issue of magazines like Rolling Stone in the mid-Nineties, got out of the music business in 2010 as MP3s, streaming and illegal downloads made their CD endeavor unprofitable. For the past five years, Columbia House has instead been dealing in DVDs, but even that market has experienced some rough times as Netflix, streaming and piracy cut into that medium’s sales.
Rolling Stone: http://www.rollingstone.com/music/news/columbia-house-files-for-bankruptcy-blames-streaming-20150811
