Widely predicted as an inevitability that would not be put off past month's end, Borders official filed for reorganizational relief under Chapter 11 bankruptcy.
announced the long-rumored filing Wednesday, saying it would close
nearly one-third of its stores (at least 200) and would continue
"normal" business at the surviving U.S. stores. A timeline has not been
publicly unveiled for its restructuring process.
Rumors of Borders'
potential demise into bankruptcy gained steam through late 2010 and,
increasingly, throughout January. The big-box book retailer intimated
twice in as many months that it would have to delay payments to
creditors and/or vendors in an attempt to bolster its capital position.
Borders also reportedly was trying desperately to renegotiate terms with
financiers at Bank of America and General Electric, among others. These
developments all helped tank a stock that was already trading below
A late 2010 poll conducted by The Street found that more
than two-thirds of respondents believed a Borders Chapter 11 filing was
likely. In the resulting fallout and that of the first announcement of
delayed vendor payments, at least one major publishing company
reportedly stopped all shipment of books to Borders, fearing what now
appears to be inevitable.
Brian Shappell, NACM staff writer