Blockbuster has reported a $491 million loss in its most recent quarter (primarily from one-time charges) and has told the SEC that it may file for bankruptcy if it is not able to complete a new financing, or if its obligations are accelerated under a current credit agreement.  The company has been hammered by the loss of revenue from eliminating late fees, competition from online retailers such as NetFlix, and the growth of DVD sales through mass merchants such as Wal-Mart and Best Buy. 

Blockbuster plans to cut costs, sell or close some of its smaller video chains, sell its direct-to-video studio, and sell several game-specialty stores.