Report: Blockbuster denies bankruptcy rumors

Dallas Blockbuster has denied news reports suggesting that the chain hired an outside party to help it put together strategic alternatives, including a possible filing for bankruptcy protection, according to the St. Louis Business Journal.

Although Blockbuster did hire Kirkland & Ellis as a consultant to assist with capital-raising initiatives, bankruptcy is not a strategy the company is pursuing, according to the report.

Blockbuster has a bank facility that is due in August, and the company is hoping to get another facility in place by the time the first line of credit expires, said a spokeswoman for Blockbuster. Even without a new credit facility, Blockbuster, if it had to, could fund its business through the rest of the year, the spokewoman added.

The company hopes that will not be necessary, so it is exploring financial options, the source said, reiterating that a Chapter 11 bankruptcy filing is not one of those options.