According to an unconfirmed report from Bloomberg, GAP may file for Chapter 11 bankruptcy protection as soon as this weekend. We believe cash flow will continue to be hurt by a deterioration in operating performance due to intense competition, a high operating cost structure and loss of financial flexibility due to more debt from the 2007 Pathmark Stores acquistion. Reflecting difficulty we believe management is experiencing in boosting liquidity through asset sales in a weak economy, we are lowering our 12-month target price $2.00 to $1.00, based on our EV/EBITDA analysis.