Borders Files Chapter 11 Bankruptcy
Posted on February 16, 2011
Bookstore chain Borders has filed for Chapter 11 bankruptcy protection. The Wall Street Journal reports:
The operator of Borders and Waldenbooks stores blamed lower consumer spending and fierce competition. Whether it can emerge as a stand-alone company will depend in large part on its ability to operate its stores more efficiently while growing Borders.com and making itself a destination for e-books, the fastest growing segment of the book-publishing business.Borders plans on closing 200 of its 642 stores because it cannot afford to keep them open. Most of the closings are superstores. Borders has already closed hundreds of stores across the U.S., but it wasn't enough to stop the damage from years of exuberant expansion.
In its bankruptcy petition, the company listed assets of $1.28 billion and liabilities of $1.29 billion as of Dec. 25, 2010. All the major book publishers are owed millions in unsecured debt, which will come behind GE Capital and others who are providing debtor-in-possession financing during the chapter 11 proceedings.