Blockbuster has filed for bankruptcy protection in the United States.
The global movie and games rental company has already closed hundreds of stores to cut debt and remain profitable.
New agreements with its creditors will allow it to cut its debts from almost $1 billion to $US100 million.
Blockbuster's operations outside the United States, including New Zealand and Australia, are not included in the bankruptcy, as they are legally seperate entities.
Enders Analysis director of research Alice Enders says the company, which is based in Texas, has struggled in the face of competition from online retailers and postal DVD rental services.
Blockbuster's 3000 stores in the US will remain open for the time being.