Mike Bruno
August 27, 2010 AT 01:13 PM EDT

Blockbuster Inc. is preparing to file for bankruptcy in mid-September, according to sources who spoke to the LA Times. The company will reportedly use its time in Chapter 11 to restructure nearly $1 billion in debt and close stores. Blockbuster already closed nearly 1,000 stores in the past year. 

Blockbuster first announced the possibility of a bankruptcy filing in March, when it reported “significant liquidity constraints” due to competition from DVD-by-mail company Netflix Inc. and DVD vending machines operated by Coinstar Inc., the parent company of Redbox.

Also: PopWatch: Life after Blockbuster. We’ll survive.

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