8-K

                              UNITED STATES
                    SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C. 20549

                                FORM 8-K

                             CURRENT REPORT

                    Pursuant to Section 13 OR 15(d) of
                    The Securities Exchange Act of 1934

   Date of Report (Date of earliest event reported) September 12, 2007

                           MOVIE GALLERY, INC.
         (Exact name of registrant as specified in its charter)

         Delaware                  0-24548             63-1120122
(State or Other Jurisdiction     (Commission         (IRS Employer
     of Incorporation)           File Number)       Identification No.)

             900 West Main Street
               Dothan, Alabama                            36301
   (Address of principal executive offices)             (Zip Code)

           Registrant's telephone number, including area code
                           (334) 677-2108
      -------------------------------------------------------------
      (Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under
any of the following provisions (see General Instruction A.2. below):

[ ]  Written communications pursuant to Rule 425 under the Securities
     Act (17 CFR 230.425)

[ ]  Soliciting material pursuant to Rule 14a-12 under the Exchange
     Act (17 CFR 240.14a-12)

[ ]  Pre-commencement communications pursuant to Rule 14d-2(b) under
     the Exchange Act (17 CFR 240.14d-2(b))

[ ]  Pre-commencement communications pursuant to Rule 13e-4(c) under
     the Exchange Act (17 CFR 240.13e-4(c))


ITEM 8.01.  OTHER EVENTS

On September 12, 2007, Movie Gallery, Inc., (the "Company") delivered
(i) a notice pursuant to Section 5.1(e) of the First Lien Credit and
Guaranty Agreement, dated as of March 8, 2007 by and among the Company
and the guarantors party thereto, the agents and lenders party thereto
(the "First Lien Credit Agreement") relating to, among other things,
the Company's decision to defer payment of interest due September 10,
2007 beyond the due date and applicable grace period therefor for such
payment under the Company's Second Lien Credit Agreement (defined
below), (ii) a notice pursuant to Section 5.1(e) of the Second Lien
Credit and Guaranty Agreement, dated as of March 8, 2007 (the "Second
Lien Credit Agreement"), among the Company, certain of its
subsidiaries, the lenders from time to time party thereto and Wells
Fargo Bank, National Association (as successor to CapitalSource
Finance, LLC), as Administrative Agent and Collateral Agent, relating
to the Company's decision to defer payment of interest due under the
Second Lien Credit Agreement on September 10, 2007 beyond the due date
and applicable grace period therefor and (iii) a notice to BNY Western
Trust Company as Trustee for the holders of the 9.625% Senior
Subordinated Notes due 2011 (the "Hollywood Notes") issued pursuant to
the First Supplemental Indenture dated as of December 18, 2002 to
Indenture dated as of January 25, 2002 by Hollywood Entertainment
Corporation and Hollywood Management Company (together, "Hollywood"),
with respect to Hollywood's decision to defer the payment of interest
due under the Hollywood Notes at least until the conclusion of the
applicable grace period for such payment.  The notices referred to in
the foregoing clauses (i), (ii) and (iii) are hereinafter collectively
referred to as the "Notices".

As set forth in the Notices, as a result of the events described in
such Notices, one or more events of default may occur under the First
Lien Credit Agreement, Second Lien Credit Agreement, the Hollywood
Notes and the Company's 11% Senior Notes due 2012 issued pursuant to
that certain Indenture, dated as of April 27, 2005 among the Company,
the Guarantors party thereto and the Trustee (as has been amended,
restated, supplemented or otherwise modified from time to time, the
"Movie Gallery Indenture").

It is the Company's view that (a) the events described in the notice
delivered to the Trustee for the Hollywood Notes do not constitute
events of default under either of the First Lien Credit Agreement or
the Second Lien Credit Agreement, (b) the events described in the
notice delivered to the Administrative Agent under the Second Lien
Credit Agreement are subject to the forbearance agreement in effect
with the Company's lenders under the First Lien Credit Agreement and
(c) the events described in the Notices are subject to the forbearance
agreement in effect with the holder of the majority of notes issued
under the Movie Gallery Indenture.

Copies of the Certificates and Notice provided by the Company are filed
herewith as Exhibits 99.1, 99.2 and 99.3, and are incorporated herein
by reference.


Forward-Looking Statements

To take advantage of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, you are hereby cautioned that
this current report on Form 8-K contains forward-looking statements,
including descriptions of the Company's proposed strategic and
restructuring alternatives and liquidity outlook, that are based upon
the Company's current intent, estimates, expectations and projections
and involve a number of risks and uncertainties.  Various factors exist
which may cause results to differ from these expectations.  These risks
and uncertainties include, but are not limited to, the risk factors
that are discussed from time to time in the Company's SEC reports,
including, but not limited to, the Company's annual report on Form 10-K
for the fiscal year ended January 1, 2006 and subsequently filed
quarterly reports on Form 10-Q.  In addition to the potential effect of
these ongoing factors, the Company's liquidity outlook is subject to
change based upon the Company's operating performance, including as a
result of changes in the availability of credit from the Company's
suppliers, and there can be no assurance regarding the Company's
ability to complete any restructuring or other transaction.  The
Company undertakes no obligation to update any forward-looking
statements, whether as a result of new information, future events, or
otherwise.


ITEM 9.01.  FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits

99.1  Certificate of Authorized Officer, dated as of September 12,
2007, from the Company to the Administrative Agent under the First Lien
Credit Agreement.

99.2  Certificate of Authorized Officer, dated as of September 12,
2007, from the Company to the Administrative Agent under the Second
Lien Credit Agreement.

99.3  Notice dated as of September 12, 2007, from Hollywood to BNY
Western Trust Company under the Hollywood Indenture.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.


MOVIE GALLERY, INC.
Date: September 12, 2007


/S/ Thomas D. Johnson, Jr.
- ---------------------------------
Thomas D. Johnson, Jr.
Executive Vice President - Chief
Financial Officer


INDEX TO EXHIBITS

99.1 Certificate of Authorized Officer, dated as of September 12, 2007,
from the Company to the Administrative Agent under the First Lien
Credit Agreement.

99.2 Certificate of Authorized Officer, dated as of September 12, 2007,
from the Company to the Administrative Agent under the Second Lien
Credit Agreement.

99.3  Notice dated as of September 12, 2007, from Hollywood to BNY
Western Trust Company under the Hollywood Indenture.

EX-99

                    CERTIFICATE OF AUTHORIZED OFFICER

                     DATED AS OF SEPTEMBER 12, 2007

I, Thomas D. Johnson, Jr., certify that I am the Executive Vice President and
Chief Financial Officer of Movie Gallery, Inc., a Delaware corporation (the
"Borrower"), and, as such, I am authorized to execute this Certificate of
Authorized Officer on behalf of the Borrower, and do hereby further certify
that:

1.  I am delivering this Certificate of Authorized Officer pursuant to
Section 5.1(e) of that certain First Lien Credit and Guaranty Agreement
dated as of March 8, 2007 (the "Credit Agreement"), among Movie
Gallery, Inc., certain of its subsidiaries, the lenders from time to
time party thereto and Goldman Sachs Credit Partners L.P. as
Administrative Agent.  Capitalized terms used but not defined herein
shall have the meanings ascribed to them in the Credit Agreement.

2.  Arising solely with respect to the Existing Defaults (as defined in
that certain Forbearance Agreement dated as of July 20, 2007 (as
amended from time to time, the "Forbearance Agreement") by and among
Movie Gallery, Inc., the lenders party thereto and Goldman Sachs Credit
Partners L.P.), the Borrower received on September 6, 2007 a letter
from Wells Fargo Bank, National Association as Successor administrative
agent under the Second Lien Credit Agreement a copy of which is
attached hereto as Exhibit A.

3.  The Borrower anticipates that, on or about September 15, 2007, an Event
of Default under Section 8.1(b)(i) of the Credit Agreement will occur
as a result of the Borrower's deferral of its payment of interest on
the loan under the Second Lien Credit Agreement beyond the period of
time permitted for such payment (the "Payment Deferral").

4.  The Borrower also anticipates that, on or about September 15, 2007, an
Event of Default under Section 8.1(b)(ii) of the Credit Agreement will
occur as a result of the occurrence of an event of default under
Section 6.1(a)(4)(i) of the Senior Notes Indenture arising as a result
of the Payment Deferral.

5.  The Borrower intends to continue discussions with the lenders under the
Second Lien Credit Agreement and has delivered to the administrative
agent under the Second Lien Credit Agreement the Certificate attached
hereto as Exhibit B.  The Borrower has obtained from the holders of
majority in principal amount of the Senior Notes a forbearance
agreement which, in accordance with its terms, requires that the
holders of Senior Notes forbear through September 30, 2007 from
exercising their default-related rights and remedies in respect of
defaults (including, in the Borrower's reasonable opinion, as a result
of the Payment Deferral) at any time occurring and continuing under the
Senior Notes.

MOVIE GALLERY, INC.


By:    /S/ Thomas D. Johnson, Jr.
       --------------------------
Name:  Thomas D. Johnson, Jr.
Title: Chief Financial Officer



                                 EXHIBIT A
                            WELLS FARGO LETTER
                              (see attached)


Corporate Trust Services
MAC N93903-120
608 2nd Avenue
Minneapolis, MN 55479
612 667-9825 Fax
Wells Fargo Bank, N.A.


September 6, 2007

Movie Gallery, Inc.
900 West Main Street
Dothan, Alabama 36301
Attention: S. Page Todd,
Executive Vice President, Secretary and General Counsel
Facsimile: (334) 836-3626

We refer to the Second Lien Credit and Guaranty Agreement dated as of March
8, 2007 (the "Credit Agreement"), among Movie Gallery, Inc. (the "Borrower"),
certain subsidiaries of the Borrower party thereto, the various financial
institutions from time to time party thereto (the "Lenders") and Wells Fargo
Bank, National Association ("Wells Fargo"), as successor administrative agent
(in such capacity, the "Administrative Agent") for the Lenders, pursuant to
which the Lenders agreed, subject to the terms and conditions of the Credit
Agreement, to extend certain loans to the Borrower. We also refer to the
Pledge and Security Agreement (Second Lien) dated as of March 8, 2007, among
the Guarantors party thereto and Wells Fargo, as successor collateral agent
(in such capacity, the "Collateral Agent", and together with the
Administrative Agent, the "agent"). Capitalized terms used in this letter but
no defined herein shall have the meanings ascribed to such terms in the
Credit Agreement.

It has come to our attention that you have failed to comply with certain
covenants, and that such failure is continuing and constitutes and Event of
Default under Section 8.1(c.) of the Credit Agreement. We are also in receipt
of the Certificate of Thomas D. Johnson Jr., the Executive Vice President and
Chief Financial Officer of Borrower, dated September 4, 2007 informing us of
the occurrence and continuance of an Event of Default under Section
8.1(b)(ii) of the Credit Agreement.

By execution and delivery of this notice, the Agent, on behalf of itself and
the other Secured Parties, expressly reserves any and all of their rights and
remedies, including without limitation, those under the Credit Agreement and
other Credit Documents, waiving none of such rights by presentment of this
notice. This notice is without prejudice to any rights or remedies of the
Agent or the other Secured Parties, including, without limitations, those
under the Credit Agreement and the other Credit Documents. The failure to
exercise or any delay in exercising, on the part of the Agent or any other
Secured Party, any right, remedy, power or privilege under the Credit
Documents with respect to the Defaults and/or Events of Default referred to
herein or otherwise existing shall not be deemed, or operate as, a waiver
thereof and all such rights and remedies are hereby expressly reserved.


WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Agent

By:    /s/ Jeffrey Rose
       ----------------
Name:  Jeffrey Rose
Title: Vice President

cc: Alston & Bird LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
Attention: Richard W. Grice, Esq.
Facsimile: (404) 881-4777

Kirkland & Ellis LLP
153 East 53rd Street
New York, New York 10022
Attention: Leonard Klingbaum, Esq.
Facsimile: (212) 446-6460

Kirkland & Ellis LLP
200 E. Randolph Dr.
Chicago, Illinois 60601
Attention: Anup Sathy, Esq.
Facsimile: (312) 660-0641



                                EXHIBIT B
                          BORROWER CERTIFICATION
                             (see attached)

EX-99

                      CERTIFICATE OF AUTHORIZED OFFICER

                        DATED AS OF SEPTEMBER 12, 2007

I, Thomas D. Johnson, Jr., certify that I am the Executive Vice President and
Chief Financial Officer of Movie Gallery, Inc., a Delaware corporation (the
"Borrower"), and, as such, I am authorized to execute this Certificate of
Authorized Officer on behalf of the Borrower, and do hereby further certify
that:

1.  I am delivering this Certificate of Authorized Officer pursuant to
Section 5.1(e) of that certain Second Lien Credit and Guaranty
Agreement dated as of March 8, 2007 (the "Credit Agreement"), among
Movie Gallery, Inc., certain of its subsidiaries, the lenders from time
to time party thereto and Wells Fargo Bank, National Association (as
successor to CapitalSource Finance, LLC), as Administrative Agent and
Collateral Agent.  Capitalized terms used but not defined herein shall
have the meanings ascribed to them in the Credit Agreement.

2.  The Borrower anticipates that, on or about September 15, 2007, an Event
of Default under Section 8.1(a) of the Credit Agreement will occur as a
result of the Borrower's deferral of its payment of interest on the
Loan beyond the period of time permitted for such payment (the "Payment
Deferral").

3.  The Borrower also anticipates that, on or about September 15, 2007, an
Event of Default under Section 8.1(b)(ii) of the Credit Agreement will
occur as a result of the occurrence of an event of default under
Section 6.1(a)(4)(i) of the Senior Notes Indenture arising as a result
of the Payment Deferral.

4.  The Borrower has obtained from the lenders under the First Lien Credit
Agreement a forbearance agreement pursuant to which such lenders have
agreed to forbear through September 30, 2007 from exercising their
default-related rights and remedies (including, in the Borrower's
reasonable opinion, the Payment Deferral).  The Borrower has obtained
from the holders of majority in principal amount of the Senior Notes a
forbearance agreement which, in accordance with its terms, requires
that the majority holder of Senior Notes forbear through September 30,
2007 from exercising its default-related rights and remedies in respect
of defaults (including, in the Borrower's reasonable opinion, as a
result of the Payment Deferral) at any time occurring and continuing
under the Senior Notes.  The Borrower also has delivered to the
Administrative Agent under the Second Lien Credit Agreement the
Certificate attached hereto as Exhibit A.


MOVIE GALLERY, INC.


By:    /S/ Thomas D. Johnson, Jr.
       -------------------------
Name:  Thomas D. Johnson, Jr.
Title: Chief Financial Officer




                                  EXHIBIT A
                            BORROWER CERTIFICATION
                                (see attached)

EX-99

September 12, 2007

BNY Western Trust Company
550 Kearny Street, Suite 600
San Francisco, CA  94108
Attention:  Corporate Trust Department
Facsimile: (415) 399-1647


Re:  First Supplemental Indenture dated as of December 18, 2002 (the
"Supplemental Indenture") to Indenture dated as of January 25,
2002  between Hollywood Entertainment Corporation and Hollywood
Management Company (together, the "Issuers") and BNY Western
Trust Company as the Trustee (the "Trustee") relating to the
9.625% Senior Subordinated Notes due 2011 (the "Notes")

Ladies and Gentlemen:

Unless otherwise defined herein, capitalized terms used herein shall
have the meanings ascribed to them in the Supplemental Indenture.
Pursuant to this letter, the Trustee is hereby advised that the
Issuers have determined to exercise their right under Section 7.01(a)
of the Supplement Indenture to defer payment of interest on the Notes
during the 30 day period following the date when such payment is due.


HOLLYWOOD ENTERTAINMENT CORPORATION

HOLLYWOOD MANAGEMENT COMPANY

By:    /S/ Thomas D. Johnson, Jr.
       --------------------------
Name:  Thomas D. Johnson, Jr.
Title: Chief Financial Officer