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Mon February 7, 2011
Borders Books "One foot in the grave and one foot on a banana peel"
This could be a pivotal week for the future of Borders Books with some sources saying the company could seek bankruptcy protection.
The Ann Arbor-based bookseller delayed payments to publishers and others the past two months. The company has been trying to negotiate with its vendors and come up with a plan to move forward. Borders has a half billion dollar financing deal in place, if it can come to terms with its vendors.
Jeff Manning is a managing director with BDO Capitol Advisors. Manning’s company closely follows the retail market.
"The challenge, if you look at the statistics, majority of companies that enter bankruptcy do not emerge. If you look at recent statistics with retailers, an awful lot of retailers have gone straight into liquidation."
Manning expects Borders’ vendors will decide it’s more in their interest to keep Borders viable. He says, if Borders does file for bankruptcy, the company will probably exit bankruptcy before Christmas. But Manning says Borders execs must be careful, since the bookseller is in a precarious position:
"One foot in the grave and one foot on a banana peel," says Manning.