US book chain Borders files for bankruptcy

By Agence France-Presse
Wednesday, February 16, 2011 8:53 EDT
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WASHINGTON — US bookstore chain Borders announced Wednesday that it has filed for bankruptcy protection from its creditors so that it can reorganize and re-emerge as “a stronger and more vibrant book seller.”

“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,” Borders president Mike Edwards said in a statement.

“To position Borders to remedy this condition, Borders Group, with the authorization of its board of directors, has filed a petition for reorganization relief under Chapter 11 of the Bankruptcy Code,” he said, citing the US statute that allows him to fend off creditors seeking repayment while the company regroups.

In recent years, Borders has lost millions of dollars, in an industry in major transition from print to digital products.

In July, Borders launched an online electronic book store to challenge Amazon, Apple and Barnes & Noble in the fast-growing market for digital books — companies that the Ann Arbor, Michigan based chain is seen as having badly trailed in the rapidly changing book market.

Edwards said Borders has received commitments for $505 million in Debtor-in-Possession (DIP) financing led by GE Capital, Restructuring Finance.

“This financing should enable Borders to meet its obligations going forward so that our stores continue to be competitive for customers in terms of goods, services and the shopping experience,” Edwards said.

“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,” Edwards said.

Recent news report predicted the reorganization filing, after Borders Group delayed payments to vendors for two months and in recent weeks aggressively pursued deals with creditors and vendors despite withholding payments to conserve cash.

“We are confident that, with the protection afforded under Chapter 11 and with the support of employees, publishers, suppliers and creditors, and the reading public, a successful reorganization can be achieved enabling Borders to emerge from the process as a stronger and more vibrant book seller,” Edwards said.

Agence France-Presse
Agence France-Presse
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  • Anonymous

    Nothing like hanging out at Borders. They should charge people to sit on the couches and read “their” books. What do you think this is, a library? Get the fuck out of here.

  • Sunshine1970

    Bummer. I have a Borders near my house. I’ve noticed the store has become more and more run down especially in the last year. The selection of books and magazines has become worse and they removed the DVD/CD section last year. I checked the other Borders around town too and they were in similar condition. I’d talk with some of my friends in the past few months and we all had the same feeling that they’d be closing some time this year.

    I’ll miss it since it was so close to me, but I have a Barnes & Noble somewhat nearby and a couple of local bookstores around town to go to which are thriving so I’ll survive.

  • Anonymous

    I was sorry to see the CD/DVD section go away too, though a few select stores still seem to have them. I prefer Borders a lot more than Barnes and Noble. As far as eBooks go, I stare at a computer screen all day at work, I don’t want to do it when I am reading on my own time. I want printed books!

  • Anonymous

    Nothing like the feel of a book. But again, book collectors are a different breed! I want to see a TV series on “Book Hoarders.”

  • Anonymous

    Support your local booksellers! Glad to see a chain go down.. Now, if we can just get Walmart to collapse…

    Don’t want to pay a few cents more? Freedom isn’t free…