Here is the official word from their website:
NOTICE EFFECTIVE 3/23/11: On 8/23/10, Blockbuster Inc. (“Blockbuster”) filed for bankruptcy in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). On 2/21/11, Blockbuster filed a motion with the Bankruptcy Court requesting authority to sell its assets (the “Sale Motion”). A copy of the Sale Motion is available at http://www.kccllc.net/blockbuster. On 3/11/11, the Bankruptcy Court entered an order authorizing Blockbuster to proceed with certain procedures related to the Sale Motion. In connection with this sale process, effective as of 4/7/11, BLOCKBUSTER GiftCards® (“GiftCards”) WILL NO LONGER BE HONORED. Blockbuster intends to honor GiftCards presented by consumers through 4/6/11.
Thanks Surviving The Stores