Dallas Blockbuster on Tuesday warned that it may need to file for bankruptcy protection after years of struggling to lessen its debt load.
In a filing late Tuesday, Blockbuster said its declining sales and cash flow, coupled with increasingly competitive industry conditions, "raise substantial doubt about our ability to continue as a going concern."
The video rental chain also said its auditors have raised doubts about its ability to operate as a going concern, Reuters reported. Blockbuster previously warned investors that auditors were likely to raise the issue.
“The key here is that it would be voluntary bankruptcy filing. Blockbuster is not being compelled at this point in their effort to continue to run the business and salvage what they’ve got,” Wedbush Morgan analyst Michael Pachter told Reuters.