* Blockbuster exploring strategic alternatives
* Pursuing possible exchange of senior subordinated notes
* Strategies may require it to seek Chapter 11
* Auditors raise going concern doubts.
LOS ANGELES, March 16 Embattled video rental chain Blockbuster Inc BBI.N said on Tuesday it was continuing to explore alternatives to strengthen its balance sheet, which may include filing for bankruptcy protection.
In a filing with the Securities and Exchange Commission, the company said it was pursuing an initiative involving an exchange of all or part of its senior subordinated notes for Class A common stock, which could require it to file for protection under the U.S. Bankruptcy Code.