1) Not enough cash to continue operations 2) Too many outstanding lawsuits and contingent liabilities that threaten to wipe out equity (see: Adidas).
Bankruptcy is still several months away if it comes to that. The next hurdle will be to make sure the company isn't delisted. Buying back stock won't work because it affects scenario #1, not enough cash to continue operations. So THQ management is in a bad spot here with the only "out" other than bankruptcy being to either sell the company or raise more cash, and both of these are hard to do with scenario #2 still looming, as few third parties would be willing to put money into THQ that may end up going directly to settling lawsuits rather than releasing games.