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Blockbuster Tanks On Bankruptcy Fears

Blockbuster is seeking up to $150 million in emergency loans as it eyes a possible bankruptcy filing, according to The Wall Street Journal.



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stock tumbled again as further signs emerged that the movie-rental chain may soon file for bankruptcy protection.

According to

The Wall Street Journal

, Blockbuster is in the process of trying to secure a $150 million debtor-in-possession loan, which is sometimes arranged as a backup plan in the event that a company and its bondholders fail to strike a deal. The loan would help Blockbuster stay in operation during a bankruptcy workout.

But the newspaper also reported that Blockbuster is looking at other options to stay out of Chapter 11.


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, which supplies Blockbuster with its DVD kiosks, was named as a potential investor.

Flashback Bankruptcy Is Blockbuster's Only Hope

Blockbuster isn't expected to file for bankruptcy before its June 24 shareholder meeting.

Earlier in the year, Blockbuster warned that a Chapter 11 filing was a possibility if it did not find enough cash to repay its nearly $1 billion in debt.

Shares of Blockbuster were sinking 10.7% to 24 cents in morning trading.

-Reported by Jeanine Poggi in New York.

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