Oct 12, 2010 (The Dallas Morning News - McClatchy-Tribune Information Services via COMTEX) -- Blockbuster Inc. has hired executive search firm Korn/Ferry International to find a new chief executive officer by Dec. 31, as required by a financing agreement included in the Dallas-based company's pre-arranged bankruptcy reorganization.
Chief executive Jim Keyes, who has led the movie-rental chain since 2007, might be a candidate for the job, said Blockbuster spokeswoman Patty Sullivan.
"Jim remains fully engaged and committed to the business and the plan. This includes active participation in any evaluation of potential CEO candidates," Sullivan said.
Securing a CEO by Dec. 31 is one of several requirements of Blockbuster's recapitalization plan, according to a document filed last month in bankruptcy court in New York.
Melanie Kusin in Korn/Ferry's New York office is leading the search team that includes specialists in digital executive talent, according to source familiar with the effort.
A highly regarded recruiter, Kusin joined Korn/Ferry in December from a competing firm, Heidrick & Struggles. She is vice chairman and senior client partner in the firm's board and CEO practice.
Some debt holders aren't happy with Keyes' direction. This summer, Keyes' contract was extended for one year to June 30, 2011. At the same time, debt holders required Blockbuster to hire a chief restructuring officer as part of an agreement to extend a $42 million interest payment.
Blockbuster's debt holders are providing bankruptcy financing and agreed to wipe out all but $100 million of the company's almost $1 billion in debt in exchange for owning the company. The company filed for bankruptcy Sept. 23 after it failed to resolve its cash crunch.
The new CEO's background should hint at what debt holders, led by investor Carl Icahn, believe is Blockbuster's future.
Turnaround instead of digital experience could signal that the business will be cleaned up in order to sell it.
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