Report: Borders Close to Liquidation
Posted on July 13, 2011The Wall Street Journal reports that Borders is close to liquidation after a deal for a private investor, named Jahm Najafi, to purchase the company fell apart. The WSJ says creditors were concerned Najafi was going to liquidate the booktore chain after paying $215 million for it.
The creditors aren't concerned about Borders being liquidated, but they believe Borders can get more money by selling itself directly to a group of liquidators. The creditors committee wants liquidators to buy Borders for at least $252 million.
Liquidation will mean the remaining 399 Borders stores will close. It also means the 11,000 people still working at Borders will be out of work. The liquidators will now be the opening bidders at the auction of the company next week. There is still a chance a new suitor will emerge before the auction on July 19, but time is quickly running out.
Dealbook reports that Borders president Mike Edwards is still hopeful a new suitor will emerge. Edwards said in a memo, "While we regret Najafi's withdrawal as the stalking horse bidder, we remain hopeful that they or other potential bidders who are interested in operating Borders as a going concern will choose to participate in the auction process on July 19."