Blockbuster teetering on the brink of bankruptcy: SEC filing
Blockbuster is struggling to keep up with the high demands of consumers who are turning more and more to its competitor, Netflix, who offers streaming movies online.
(IBTimes) -- 04/07/2009 --

Blockbuster is struggling to keep up with the high demands of consumers who are turning more and more to its competitor, Netflix, who offers streaming movies online.

The company warned in an SEC filing on Monday that in spite of a $250 million refinancing loan that was put into place just last week; Blockbuster now says there is "no assurance" that it can meet the requirements of the transaction before it's completed on May 11th.

"Even if the amended credit facility is funded upon the terms contemplated, we may not have sufficient liquidity to finance the ongoing obligations of our business, which raises substantial doubt about our ability to continue as a going concern," the company said in the filing.

The video store is no longer certain that it can remain a "going concern" and may have to stop operations and close its doors if its financial situation doesn't improve in the near future.

The movie-rental chain is suffering from a heavy debt load and is under continued attack from competitors, like Netflix, that offers DVD rental by direct-mail and online.

The company's shares dropped 90 percent in early March on rumors that it might file for bankruptcy and the company has had to postpone a redesign of its stores to save cash.

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