Borders Books may file for bankruptcy Monday
The Wall Street Journal is reporting that Borders Group may file for bankruptcy protection on Monday or Tuesday next week. The Ann Arbor-based bookseller has struggled in recent years as book buyers have migrated from big box stores to the web.
Borders has been losing millions of dollars as it's management has tried to find a reason for book buyers to use its stores or website. The bankruptcy filing has been expected. Jeff Manning, a managing director with BDO Capitol Advisors, told Michigan Radio last week that Borders might have trouble exiting bankruptcy protection once it enters.
"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.”
Still Manning suggested Borders' creditors might be willing to work with the book seller, if for no other reason than to avoid losing money in a liquidation. Borders stock tumbled on the news of the Wall Street Journal story. A share of Borders Group stock is worth less than a tenth of what it was a year ago.
Borders spokesman Mary Davis issued a terse statement this afternoon on the Wall Street Journal report:
"There have been constant inquiries by reporters, and stories written, regarding whether Borders is considering a Chapter 11 filing. Borders is not prepared at this time to report on the course of action it will pursue."