Borders Files For Bankruptcy

Borders Bookstore

Well it looks like the inevitable has finally happened and after a drawn out process that began at the end of last year when it missed payments to top publishers, Borders Group has filed for Chapter 11 bankruptcy protection in Bankruptcy Court for the Southern District of New York.

Publishers Weekly reports that the company has received $505 million in debtor-in possession financing led by GE Capital, Restructuring Finance.

As part of its turnaround plan, the company reportedly plans to close approximately 30% of its current store base, about 200 locations, within the next several weeks.

Borders president Mike Edwards in a statement explaining the decision to file for Chapter 11:

“It has become increasingly clear that in light of the environment of curtailed customer spending, our ongoing discussions with publishers and other vendor related parties, and the company’s lack of liquidity, Borders Group does not have the capital resources it needs to be a viable competitor and which are essential for it to move forward with its business strategy to reposition itself successfully for the long term. This decisive action will give Borders the opportunity to achieve a proper infusion of capital in order to have the opportunity to have the time to reorganize in order to reposition itself to be a successful business for the long term.”

According to Borders, this plan should let the company continue to operate the stores that will remain open, as well as make payroll and continue its benefits programs for its employees. It will also help them to continue honoring their Borders Rewards program, gift cards, and other customer programs.

Though closing many stores, Borders reportedly said that it plans to remain “a national presence,” and that in addition to its bricks-and-mortar stores it will continue to operate its online bookstore and its e-bookstore.

To check out a list of the Borders locations that are closing, click HERE..

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