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Borders files for Chapter 11 bankruptcy

Borders_glendale

Beleaguered bookseller Borders Group filed for Chapter 11 bankruptcy Wednesday. The move has been expected by publishing industry watchers, who have seen the nation's second-largest brick-and-mortar books retailer struggle -- and fail -- to secure needed funding in recent months.

Borders has received $505 million from GE Capital for "so-called debtor-in-possession financing," Bloomberg reports. In its Chapter 11 filing, Borders listed assets of $1.28 billion and debt of $1.29 billion.

A significant portion of that debt is owed to publishers. The Wall Street Journal reports that "Borders' five largest unsecured creditors are the book publishers Penguin Putnam Inc., Hachette Book Group, Simon & Schuster Inc., Random House and Harper Collins Publishers."

Publishers will take a double hit -- first as creditors, who will have to line up for payment, and second as vendors losing a reliable, if flagging, sales venue.

In its restructuring, Borders said it expects to close about 30% of its more than 600 stores nationwide.

There is no news yet about which Southern California stores -- in Glendale, Sherman Oaks, Pasadena and elsewhere -- might be subject to closure. Westwood's Borders closed in January.

RELATED:

Is Borders on the brink of bankruptcy?

What's going on with Borders?

Westwood's Borders takes a bow

Borders moves toward financing, but doesn't rule out bankruptcy

-- Carolyn Kellogg

Photo: Borders Books & Music in Glendale on Jan. 26. Credit: Gary Friedman / Los Angeles Times

 
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I'm sorry for all of the employees, but in the last 5 years, at least in Fort Lauderdale, you could tell that the managment really had no interest in providing ALL of the new (and old) music available to the buying public. They helped cause the surge in online music shopping. They have not kept up with new artists and still have name tabs for artists that have not made music in decades. After Barnes & Nobles goes, it will be internet only for music shopping.

This sucks, I regularly go to the Borders of Sherman Oaks, now there's large CLOSING signs on it. The internet and globalisation is to blame


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