Movie Gallery: Out from bankruptcy in 2Q

DOTHAN, Ala. Movie Gallery announced Tuesday that it expects to emerge from bankruptcy shortly after the start of its second quarter of fiscal 2008.

Movie Gallery  announced a reorganization plan  on Dec. 22, 2007, which is supported by all of its key creditor groups. The plan provides for the conversion of the company's $325 million 11% Senior Notes and other general unsecured claims into new equity of reorganized Movie Gallery.

The company said it will ask the Bankruptcy Court of the Eastern District of Virginia to confirm its plan in the second quarter of 2008.

“We appreciate the cooperation of our major constituents and believe that their strong support will facilitate our successful restructuring,” said Joe Malugen, chairman, president and ceo of Movie Gallery. “In addition, we thank our customers, our business partners and the partners and associates of Movie Gallery and Hollywood Video for their continued loyalty. We are making significant progress in our efforts to reposition the company for improved performance and we look forward to creating value for all of its stakeholders upon emergence.”