Background

Movie Gallery Inc. serves as a home-video specialty retailer primarily focused on the rental and sale of DVD and video games. As the second largest North American home-entertainment specialty retailer serving the U.S. market, the company acquired Hollywood Entertainment Corporation in 2005, creating a combined organization of more then 4,500 stores in the United States and Canada operating under the brands Movie Gallery, Hollywood Video and Game Crazy.

Looking to improve its balance sheet, release the company from its non-profitable lease agreements and binding operational contracts, Movie Gallery made the strategic decision to undergo a formal corporate restructuring in 2007. Working closely with their team of professionals, KCC provided its administrative-support solutions throughout the process. After just seven months, Movie Gallery emerged from its first successful Chapter 11 protection with a stronger balance sheet.

With the dramatic change in the DVD and video game rental and movie sales business and the growing popularity of Video-on-Demand and Internet and Kiosk rentals, Movie Gallery looked for ways to improve its balance sheet and address continued operational issues. It filed for a second Chapter 11 protection on February 3, 2010.

Results

Collaborating with Movie Gallery’s team of professionals at SNR Denton and Kutak Rock, KCC provided a wide range of administrative-support services. In addition to facilitating noticing to more than 125,000 creditors, KCC tracked Schedules data, maintained claims registers of more than 6,500 filed claims and 6,700 scheduled claims and managed the claims process through multiple bar dates. Utilizing KCC proprietary technology platform, KCC managed lease rejections and maintained a database for Movie Gallery’s more than 2,400 stores.

In May 2010, the company and its creditors announced their agreement to close all U.S. stores and wind down operations. Throughout the Liquidation procedures, KCC acted as a liaison between First Lien Liquidation Trust and General Unsecured Creditor Trust. KCC processed and assisted in the reconciliation of secured, administrative and priority claims and general unsecured claims, prepared claims objections and accumulated W-9 information for disbursements.

To learn more about how KCC can help ensure your success, email or call us at 866.381.9100.