Borders Inching Closer to Bankruptcy

Posted on February 3, 2011

The Wall Street Journal analyzes the latest press release by troubled book chain Borders and concludes that a bankruptcy filing is a real possibility.

Borders has negotiated a $550 million load from GE Capital to help stave off bankruptcy, but the deal has many conditions that must be met before Borders can get the money. Borders is reportedly looking at all options, such as closing stores, laying off more staff and trying to cut a better deal with book publishers.

Other reports say Borders is still behind paying book publishers, who are very unhappy with the way things are going. Some analysts believe the store will file for Chapter 11 as soon as it gets Debtor-in-possession financing lined up.