Blockbuster files for Chapter 11

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The DVD and games rental company Blockbuster filed for bankruptcy protection in the US today in an attempt to cut its $1bn [£640m] debt mountain.

Blockbuster operations outside the US – including in the UK, where the chain has 605 company-owned stores – are unaffected by the developments.

The group has filed so-called Chapter 11 petitions with the US Bankruptcy Court in New York – a provision under US law which allows companies to continue to function while they follow debt repayment plans.

Blockbuster has a plan in place to reduce its debts of nearly $1bn to $100m.

The company has more than 4,000 stores outside the US. A spokesman for Blockbuster in the UK said it was "not party" to the bankruptcy filing and will continue to trade as normal.

The group has pledged to keep its 3,000 US stores open for the time being.