Lessons Learned:  Movie Gallery’s first bankruptcy was attributable to the unmanageable debt they took on in their acquisition of competitor Hollywood Video for $1 billion in 2005. The second Movie Gallery bankruptcy is due to bad fundamentals for bricks and mortar movie rental locations – even worse than anticipated by the two private equity firms who took it out of its first bankruptcy.  (Retail movie rental is turning out to be such a weak business that market leader Blockbuster is once again at risk of bankruptcy. ) The private equity firms would have done better to put their money in shares of Netflix, which has increased from $39/share in May, 2008 to a current price of nearly $70/share.