Movie Gallery Recieves Extended Time To Pay Off Creditors

Movie Gallery Inc. has said that its creditors agreed to extended their promise not to call the company’s outstanding debt for repayment by a month, provided that the company doesn’t miss any more payments to them.

It was reported that the nation’s second-biggest video rental chain was unable to meet financial covenants due to “significantly” weaker-than-expected second-quarter results. The company then signed a forbearance agreement with senior lenders in July.

Tuesday saw the creditors agreeing to delay exercising any rights to call in the debt until September 30. The previous restraint period was to last through Monday. It was also said that in July, Movie Gallery were considering various strategic options, including a possible sale of the company. Movie Gallery Inc have been in financial difficulty since buying rival Hollywood Entertainment Corp. back in 2005.

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