One of its key creditors, JPMorgan, has now ordered Thornburg to liquidate assets after it was not able to raise $28 million in extra collateral, according to the Times.
JPMorgan has lent Thornburg $320 million, but is asking for the mortgage group to liquidate some of its assets.
Thornburg was handed a default notice by JPMorgan after the lender failed to meet the margin call.
After the initial push from JPMorgan, other lenders are expected to follow suit, which would be likely to thrust Thornburg into bankruptcy.
Jason Arnold, an RBC Capital Markets analyst, told the Times: "Thornburg appears to be on the ropes and, barring a sizeable capital injection, which is possible but seems very unlikely at this point, in our view, we see little in the form of upside.
"Cross-default provisions will likely lead other lenders to follow suit in laying claim to assets, leaving little value remaining. With limited options, we now think a bankruptcy filing is a more likely outcome."