The largest unsecured creditors are...

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Feb. 4 (Bloomberg) — Movie Gallery inc., the second- largest company in the movie-rental business behind Blockbuster inc., survived less than two years outside bankruptcy.
The Wilsonville, Oregon-based company filed a Chapter 11 petition again on Feb. 2 in Richmond, Virginia, where the prior reorganization concluded following a confirmed recovery plan in may 2007.

Movie Gallery is immediately closing 760 locations, leaving 1,906 in operation. The company warned in a statement that it “anticipates” closing additional stores.
Revenue in 2009 declined by almost $550 million, to $1.4 billion. The operating loss in the fourth quarter of 2009 was $129 million. In the last quarter of 2008, the operating loss was $84.8 million.

Movie Gallery blamed the filing in part on competition from companies like Blockbuster, Netflix inc. and Redbox Automated Retail LLC.

Debt includes $100 million owing on a secured revolving credit, $394 million on a first lien facility, and $146 million in claims held by second-lien creditors. The largest unsecured creditors are affiliates of Warner Communications inc., Sony Corp., Twentieth Century Fox Home Entertainment, Universal Studios inc. and Viacom inc., owed $9.5 million to $6.9 million each.
Movie Gallery is asking the bankruptcy court for authority to retain Gordon Brothers Retail Partners LLC as agent to help in closing 805 stores. If gross proceeds from the sale are less than $105 million, Gordon Brothers will pay Movie Gallery $100,000. If gross proceeds are more than $110 million, the agent will receive a 2.5 percent commission for sales above $110 million.

The prior reorganization required only seven months in bankruptcy court. The previous plan, negotiated before the Chapter 11 filing, was financed in part by a $100 million secured loan.

Holders of $325 million in 11 percent senior notes were predicted to have a 22.1 percent recovery in the prior case while other unsecured creditors were projected to see 6 percent on their claims . Unsecured creditors and holders of senior subordinated notes of Hollywood Entertainment were to have an estimated 12.5 percent recovery.

The prior plan reduced liabilities $400 million by exchanging debt for stock. Other financing for the reorganization came from a $50 million equity rights offering.

Movie Gallery operates under the names Movie Gallery, Hollywood Video and Game Crazy. it had 3,490 stores before the prior bankruptcy. The all-time peak was 4,800 stores. The previous petition listed assets of $892 million against debt totaling $1.4 billion.

The new case is In re Movie Gallery inc., 10-30696, U.S. Bankruptcy Court, Eastern District Virginia (Richmond). The prior case is In re Movie Gallery inc., 07-33849, in the same court.