Movie Gallery preparing to file bankruptcy -WSJ

* Hollywood Video operator to file Chapter 11 -WSJ

* Filing could come as soon as next week -WSJ

LOS ANGELES, Jan 27 (BestGrowthStock) – Rental company Movie
Gallery Inc (MVGR.PK: ) plans to file for Chapter 11 bankruptcy
as soon as next week, marking the second time in two years the
owner of Hollywood Video stores has sought protection from
creditors, the Wall Street Journal reported on Wednesday.

Movie Gallery did not respond to repated calls and emails
for comment.

The debt-burdened company, based in Oregon, has faced harsh
competition from upstart mail services like Netflix Inc
(NFLX.O: ) and kiosks such as Coinstar Inc’s (CSTR.O: ) Redbox.

But it remained the No. 2 U.S. film rental company in terms
of the number of stores and revenue, behind Blockbuster Inc
(BBI.N: ).

The Wall Street Journal cited people familiar with the
matter as saying Movie Gallery could seek Chapter 11 protection
from creditors as soon as Tuesday, and that it could try to
close about two-thirds of its outlets, or 1,800 stores.

Movie Gallery filed for bankruptcy in October 2007 and
emerged from that in May 2008.

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(Reporting by Alex Dobuzinskis, Chelsea Emery in New York)

Movie Gallery preparing to file bankruptcy -WSJ