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Bankruptcy Judge OKs Borders' Liquidation Petition

July 22, 2011
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NEW YORK—Borders Group, the nation's second largest book retailer, stood at the brink of extinction after a bankruptcy judge approved the liquidation of its 40-year-old business. The move will result in the closing of 399 stores and will impact nearly 11,000 jobs. Borders is also working on a side deal with fellow bookstore chain Books-A-Million that could save as many as 35 stores and 1,500 jobs.

An attorney for Borders told Reuters that the plan being negotiated would see Books-A-Million acquire the inventory and merchandise at certain stores. As for the liquidation itself, it is expected to realize between $250 million and $284 million, which Borders will use to pay back creditors.

A private equity firm that owns the Book-of-the-Month Club had offered $215 million in cash and $220 million in assumed liabilities—a move that would have kept Borders afloat and saved the jobs—but the objection of creditors put the kibosh on a last-minute save.
 
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