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Dealscape's greatest hits and wackiest rumors: Week ending April 11, 2008

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Windmill_Hamptons_NY.jpgThe rumor that kept our mill busiest this week was the prospects of troubled retailer Linens 'n Things Inc. filing for Chapter 11 bankruptcy protection. The first publication to report the possibility was the New York Post, and despite the murky sourcing of the Tuesday story, it quickly caught fire as the rest of the business media jumped on board.

Despite weak evidence for a prepackaged bankruptcy filing on Tuesday, the press coverage may ultimately expedite the Clifton, N.J.-based retailer's fall. A slew of follow-up stories appeared throughout the week. The press reports may have prompted the ratings agencies to take a closer look at the retailer's debt because by Wednesday Fitch Ratings downgraded Linens 'n Things.

By Friday, as more media outlets reported that the retailer was on the precipice of bankruptcy, the company, owned by Apollo Management LLP, reportedly hired restructuring firm Conway Del Genio Gries & Co., which is also working on a turnaround for another bankrupt retailer, the Sharper Image Inc. Reuters reported that Linens 'n Things retained Conway to guide it through its options as the retailer scrambled to avoid a Chapter 11 filing. The situation continues to worsen for Linens 'n Things, and The Wall Street Journal added that a bankruptcy filing could come Tuesday after a meeting with lenders -- a week after the New York Post set the story, if not Linens' greater woes, in motion.

After the jump, we unabashedly revel in the best of the week's other rumors, speculation and manias. - Matthew Wurtzel

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