Movie Gallery Creditors OK Plan

Dothan, Ala., Movie Gallery Inc. said late Tuesday that its creditor groups have agreed to support its reorganization plan as it attempts to exit bankruptcy.

The company sought Chapter 11 bankruptcy protection in October after months of struggling with debt from its 2005 purchase of rival Hollywood Entertainment Corp. for $1 billion.

At the time Movie Gallery said Sopris Capital Advisors LLC, a private investment group, would finance a reorganization of its debt.

The reorganization plan includes converting $325 million in senior notes into new equity of the reorganized company and canceling existing common stock.

Movie Gallery said it will ask the Bankruptcy Court for the Eastern District of Virginia to confirm its reorganization plan early in the second quarter and will look to exit bankruptcy shortly after confirmation.