Glen-Allen, Va.-Based Subprime Lender Warns of Possible Bankruptcy Filing.

Byline: Carol Hazard

Jun. 28--Dynex Capital Inc. could be forced into bankruptcy, following the fate of at least a half-dozen other specialty finance firms in the past year and half, its president warned shareholders at yesterday's annual meeting.

But the Glen Allen-based firm is trying to fend off that possibility by working with lenders to pay off its debts, said Thomas H. Potts.

"The company has short-term credit obligations, and even though we're not in default, we're still on a very short fuse," he said.

Other options are to sell the company or remain independent.

"We're on the cusp," Potts said after the meeting.

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