Borders to File Chapter 11 (UPDATE 7/18: Company To Liquidate)

[Eye Candy]

http://latimesblogs.latimes.com/jack...ankruptcy.html

People close to Borders Group, the national book retailer, said it may file for Chapter 11 bankruptcy as early as Monday or Tuesday, the Wall Street Journal reports. According to the WSJ, talks between the bookseller and creditors, including publishers, have failed to result in a restructuring plan that would have enabled new financing.

In a Friday report, the Wall Street Journal wrote:

Borders warned of looming cash problems in December and stopped paying certain bills, leaving publishers, landlords and others in the lurch. The company reached a tentative deal with GE Capital for a new $550-million secured credit line that came with several tough conditions.

To get the financing and avoid bankruptcy, Borders needed to persuade publishers or others to convert unpaid bills to $125 million in loans.

Publishers balked at the request and told Borders it wanted the company to use bankruptcy proceedings to close stores and become more viable, said a person familiar with the situation.

According to the WSJ's sources, Borders may soon close 200 of its 674 stores, meaning the loss of thousands of jobs. And hundreds of places for readers to buy books.