Movie Gallery shares dive

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Movie Gallery shares plunged 42% on Monday, a reaction to a report that the video rental chain was likely to file for Chapter 11 bankruptcy protection under a deal with key creditors.

Under the plan, Movie Gallery would convert its bonds to stock and a part of its second-lien debt as well. Movie Gallery had $1.2 billion in debt as of July, including $322 million in bonds, $175 million in second-lien debt and $600 million in first-lien debt. Movie Gallery was Monday's biggest loser on The Hollywood Reporter Showbiz 50 stock index.
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