* 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.
The company also said its auditors have raised doubts about
its ability to operate as a going concern.
(Reporting by Susan Zeidler; editing by Andre Grenon)