Friday, February 11, 2011

Borders Prepares Bankruptcy Filing

Mike Spector and Jeff Trachtenberg, WSJ:
Borders Group Inc. is in the final stages of preparing a bankruptcy filing after failing to persuade publishers and others to go along with a plan to refinance the troubled bookstore chain's debt.
The Ann Arbor, Mich., bookseller could file for Chapter 11 bankruptcy protection as soon as Monday or Tuesday, said people familiar with the matter, paving the way for the closure of about 200 stores and thousands of job losses.
The people cautioned the filing could be delayed a few days. But Borders has pivoted from focusing on refinancing efforts and is preparing bankruptcy papers and seeking financing agreements that would keep it afloat during the Chapter 11 reorganization process, those people said.
"There have been constant inquiries by reporters, and stories written, regarding whether Borders is considering a Chapter 11 filing," a Borders spokesman said. "Borders is not prepared at this time to report on the course of action it will pursue."
Borders initially plans to close about 200 of its 674 stores, the people said. Liquidators have been bidding for the right to run the store closures, with an option to close an additional 50 stores or so under similar terms, the people said. ...