NEW YORK ( TheStreet) -- Blockbuster ( BBI) shares resumed trading Friday morning, but the threat of delisting still looms -- and is driving the stock ever-downward. Shares of the movie rental retailer are plunging 19.8% to 18 cents, following an announcement last night that the New York Stock Exchange may begin delisting the stock. The company said shareholders failed to approve a recapitalization plan, which included combining Class A and Class B common stock or the option for a reverse stock split, which was necessary to comply with listing requirements. As a result, NYSE halted trading of Blockbuster on the Big Board Thursday afternoon.
Management previously assumed that it had secured the necessary votes during its annual meeting last week, but the final count showed otherwise. Blockbuster was scheduled to pay $42.4 million on Thursday, but at the final hour the company said it entered into an agreement with its senior secured bondholders, providing it with more time and flexibility to find recapitalization opportunities. "The company determined that entering into the Forebearance Agreement and not making payments at this time are in the best long-term interests of the company and its stakeholders," CEO Jim Keyes said in a statement. Blockbuster now has until Aug. 13 to make the payment. Under the agreement, Blockbuster must also hire a restructuring officer, and provide weekly executive summaries, including cash-flow forecasts, each Thursday. Keyes also reaffirmed his commitment to head Blockbuster. The board approved the extension of his contract, which was set to expire the week.