ST. PAUL-Video Update has filed a reorganization plan in which competitor Movie Gallery will obtain all of the equity in the St. Paul-based video rental firm. The deal that’s been cut calls for forgiveness of a $5-million debtor-in-possession financing it extended in May.

The firm had 600 stores when it filed for protection from creditors last September. Since then, about 250 stores have closed, according to company officials. Video Update now has about 350 stores, most in the Upper Midwest, Northwest, Southeast and Canada. The plan also provides for a restructuring of Video Update’s senior secured debt, of which South Carolina-based Movie Gallery holds 92%. It also establishes an unspecified cash payment for the satisfaction and release of all general unsecured claims. Movie Gallery also will provide Video Update with working capital financing following the plan’s confirmation. On Sept. 11, the Delaware Bankruptcy Court will take testimony on the plan.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Dig Deeper


GlobeSt Net Lease Spring 2024Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join now!

  • Free unlimited access to's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including and

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2023 ALM Global, LLC. All Rights Reserved.