Boo.com is running short of cash having reported consistently poor sales and spending millions on launching the global shopping service.
A planned IPO has been scrapped as investor interest in consumer-oriented internet services has severely waned.
Shareholders, including investment banks JP Morgan and Goldman Sachs, are thought to be unwilling to fund another round of investment following the fall in the value of internet stocks.
A spokesman for one of the shareholders quoted in The Wall Street Journal said: "I can confirm that the shareholders are seeking a resolution."
The decision would be a blow for the founders who touted the company as the first truly global e-commerce venture. However, the company has been weighed down by staffing, marketing and severe technical problems.
Most recently, more than 70 staff were made redundant and a number of senior executives left the company. These included Luke Alvarez, vice-president and chief development officer, who resigned last month to become chief operating officer of Emap Digital.
The departure of Alvarez came just a month after that of Dean Hawkins, finance director, who left for Chello Broadband, the Dutch internet company. He was preceded by one of Boo's founders, Patrik Hedelin, who left to spend more time with his family.
Last month Boo reported underlying sales of $671,400 (£430,000) for its first quarter. However, trading has been much slower than many expected. Its much delayed launch left piles of unsold autumn/winter stock and was also hit by its failure to sign distribution agreements with Nike and Adidas.
It launched an immediate sale -- with offers of 40 percent off -- to clear the backlog, which was something it had said it would never do.