The top-tier consulting firms and banks care about your grades. They might ask for GMAT scores or UG GPA too. Even in those cases, all those numbers do is get you in the door - then you're on your own.
In virtually all other cases, no one cares. Fuqua has grade disclosure, but recruiters don't ask, and no one actually puts their GPA on their resume (that's very undergrad thing to do). Your grades - seriously now - do not matter.
For that matter, no one actually gets bad grades in B-school. We're all on these grading schemes that don't use A/B/C/D - at Fuqua, we have Superior Pass (SP)/High Pass (HP)/Pass (P)/Low Pass (P). Perhaps it's just a semantical difference, but it's there to dissuade people from caring about grades in the first place. Noteworthy: at Fuqua, professors are required to contact you halfway through the term if you're in danger of getting an LP, and then they have to get written permission from the Dean (!) to actually give you one. In our class of 440-some-odd, I have heard stories of two or three people actually pulling LPs. You seriously have to work
to get one. And you'll note that an LP is still a passing grade. This is the norm in most top-tier schools. As they say, "P = MBA".
You're probably paying $100k to go to B-school. You're not paying to go there and fail, or to collect a record that will dissuade employers, and schools aren't going to let you do that.
Fuqua School of Business
Daytime MBA Class of 2011
NB: I'm not an "official" Fuqua ambassador in any way. Just a guy who benefitted from the advice/views on gmatclub back when I was applying, and now looking to return the favor.