February 28, 2011 - 11:12pm
Borders files for bankruptcy protection
BY JOSEPH LICHTERMAN
The Ann Arbor-based bookseller Borders Group, Inc. filed for Chapter 11 bankruptcy this morning.
The company, which owns Borders and Waldenbooks, filed for protection in U.S. Bankruptcy court in New York City this morning. According to the bankruptcy filing, the company said it will close about 30 percent of its stores nationwide within the next few weeks — including its Ann Arbor store on Washtenaw Avenue at the Arborland Mall.
“It has become increasingly clear that in light of the environment of curtailed customer spending, our ongoing discussions with publishers and other vendor related parties, and the company’s lack of liquidity, Borders Group does not have the capital resources it needs to be a viable competitor,” Borders Group President Mike Edwards wrote in a Borders Group press release made public today.
According to the company's bankruptcy petition, as of Dec. 25, 2010 the company held assets of about $1.28 billion and liabilities of about $1.29 billion. The company also operates 642 stores nationwide and employs more than 18,000 full and part-time employees.
According to the press release, Borders secured a $505 million loan from GE Capital to finance its day-to-day operations while it’s in bankruptcy. The loan, however, is pending court approval.
“This financing should enable Borders to meet its obligations going forward so that our stores continue to be competitive for customers in terms of goods, services and the shopping experience,” Edwards wrote in the statement.
According to the press release, Borders will continue to allow customers to use gift cards and its Borders Rewards program.
Brothers Tom and Louis Borders founded the company in 1971 and opened their first store on State Street in Ann Arbor.
