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Report: Sirius Radio prepares bankruptcy filing

Satellite radio company faces debt crisis, and bankruptcy may force EchoStar to acquire the company, according to The New York Times.

Sirius XM Satellite Radio, the financially troubled radio service, is busy preparing for a possible bankruptcy filing, according to a published report.

Sirius, home of shock-jock Howard Stern, has been working with advisers on the bankruptcy documents that could be filed within days, according to The New York Times.

Sirius is staring at a significant debt crisis. According to a story that appeared on Yahoo finance, financial research firm, Moody's, "thinks there's a 'high likelihood' that Sirius will fail to repay or refinance its debt in 2009."

Sirius' debt comes due on Tuesday, according to the Times' story. The company may file for Chapter 11 bankruptcy to pressure Charles Ergen, the satellite-TV magnate who recently bought up most of Sirius' debt, to make a formal offer for the company, the Times reported.

If Ergen chooses to wait and Sirius files for bankruptcy, it might force him to obtain the company through an auction or bankruptcy court. Another alternative for Ergen is to convert his debt into an ownership stake, according to the report.