Tom Reid doesn't know from leveraged buyouts and bond exchange offers. All he wants is to sell Slurpees and Big Gulps at his 7-Eleven franchise in Waldorf, Md., and make some money doing it.

But Reid and other Washington area 7-Eleven store operators have had to pay a lot of attention lately to the financial contortions that the chain's debt-heavy parent company, Southland Corp. of Dallas, has undergone in the last year to nail down a deal to be acquired by a Japanese company.

Southland's problems have made his customers and vendors nervous, according to Reid, creating an image that the chain, already jarred by a soft retail environment and competition from gas station-convenience stores and supermarkets, does not need. Now the ride may be getting rockier.

This week, Southland extended for the fourth time its offer to exchange most of its bonds for debt that cuts its interest costs -- a crucial step for completing the acquisition. It also sweetened the proposal by offering bondholders a cash-and-stock option.

And, most importantly, for the first time it publicly outlined preparations to file a "prepackaged" plan to reorganize its finances by asking for protection from its creditors in U.S. Bankruptcy Court if the holders of its bonds don't accept the latest exchange offer. The company has never spelled out that idea before.

"They {Southland managers} have had such blinders on with all this financial difficulty. ... I hope that it all doesn't end up hurting us in the field," said Reid, who also is president of the 7-Eleven Capital Area Franchise Association.

A lot has happened already. In March, Ito-Yokado Co., Japan's second-largest and most-profitable retailer and the operator of all 7-Elevens there, offered $430 million to buy 70 percent of Southland -- if its $1.8 billion of public debt could be restructured.

So far, despite many changes in the offer, the holders of that debt have been slow to respond. Southland hasn't gotten the 95 percent acceptance from all bondholders that the Japanese deal requires. Among the five classes of bonds, approval ranged from 45.6 percent to 94.04 percent as of earlier this week.

At the end of this week's deadline, Southland had made little progress since it last extended the offer. In the latest amendment to the debt-swap offer, to end Oct. 22, Southland is offering smaller bondholders a cash-and-stock option, rather than the previous one of new debt and stock.

If that's not enough, Southland said it would begin seeking support for its last hope: bankruptcy proceedings involving the "prepackaged" reorganization.

Estimated by Southland to require only six months, the plan would have the company entering bankruptcy with a completed plan of reorganization and the cooperation of its creditors. This option would compel recalcitrant bondholders to go along with the plan because it requires the approval of two-thirds of them rather than 95 percent.

Financial analysts think the public display of the bankruptcy option will finally get the reluctant bondholders moving toward a deal. "Southland has now clearly said though it does not want to go into bankruptcy, it will not avoid it at all costs," said Jay Lustig of Drake Capital Securities Inc. in Santa Monica, Calif.

But the bankruptcy plan has risks, including the possibility that it may jeopardize the Ito-Yokado buyout. Japanese culture considers bankruptcy dishonorable, and Ito-Yokado is a conservative company, even by Japanese standards, said Kumiko Murata, an analyst at Lehman Brothers Japan Inc. "They don't have anything to lose if the deal doesn't go through," she said.

Although Ito-Yokado has stuck with the deal so far, executives in Japan declined comment on the bankruptcy option. Sources at Southland are confident of Ito-Yokado's resolve to buy Southland and said it helped develop the bankruptcy option.

How this will all play out in Washington, where 874 7-Elevens and High's Dairy stores make Southland's Capital Division the company's largest, is unclear. Of the area outlets, 258 are franchises and the rest are owned by Southland.

Southland officials said this week that even under a bankruptcy court's protection, business at the area stores would remain unaffected.

That is no consolation to people like Reid, who thinks a bankruptcy filing could further hurt business at a time when the economy looks shaky and could make customers and vendors even more nervous.