Borders files for Chapter 11 bankruptcy
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.
-- Carolyn Kellogg
Photo: Borders Books & Music in Glendale on Jan. 26. Credit: Gary Friedman / Los Angeles Times