How Will Movie Gallery Bankrupcy Affect Troy ?

MeanGreen61 · October 17, 2007

Movie Gallery declares Chapter 11 bankruptcy

By Misty Bell and Matt Clower, The Messenger

-> http://www.troymessenger.com/article...ws/newss01.txt

Movie Gallery Inc. of Dothan filed for Chapter 11 bankruptcy just after midnight Tuesday, raising questions about the future financing of Troy University's Movie Gallery Veterans Stadium.

“Basically, at this point in time, Movie Gallery's business is moving forward just like any other business would be in this situation,” said Troy University Athletics Director Stephen Dennis. “They haven't closed shop, and our relationship with them is very positive. Nothing's changed so to speak. Today, nothing's changed in our relationship with them.

“This has not affected me at this point in time, and I don't foresee it affecting me.”

Movie Gallery is providing Troy University $250,000 per year under a 20-year, $5 million agreement to sponsor the stadium. The partnership is in its fifth year, and University Relations Director Tom Davis said Movie Gallery is up to date on its payments under the current terms of the obligation.

He said it is too soon to predict how Movie Gallery's bankruptcy will affect the partnership with the university.

“Movie Gallery has been an outstanding partner for the university, and we've enjoyed our relationship and look forward to continuing that relationship,” Davis said. “Right now, the announcement has just been made, and there is a lot that has to be done. It would be premature to speculate about what is going to come out of all of this.”

Davis said the university will be in communication with Movie Gallery throughout its financial reorganization.

“Our administration will be in contact with officials at Movie Gallery all through this process,” Davis said.

Currently, Movie Gallery has entered into a process of reorganizing, restructuring and negotiating with lenders and motion picture studios.

“Filing for Chapter 11 allows us to operate our business without interruption while continuing to implement a debt restructuring in a controlled, Court-supervised environment,” said Joe Malugen, chairman, president and chief executive officer of Movie Gallery, in a press release. “The support we are receiving from our creditors as we enter this process is a testament to their confidence in Movie Gallery's ability to emerge from bankruptcy as a stronger, more competitive company.”

Andrew Siegel, a spokesman for Movie Gallery, said he was uncertain how the company would proceed in its connection to Troy University.

“I'm not really sure there's much we can say at this point,” Siegel said. “Unfortunately there's not much I can tell you to clarify that today. There's no way I can speculate on what may happen down the road. That has not yet been determined.”

For now, life will go on as normal in Troy as the Trojans prepare for their homecoming match against North Texas.

“The bottom line: Today's another day, and we're moving forward,” Dennis said. “Nothing's changed.”