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Thu February 17, 2011
Borders: What's Next?
Borders Books’ successful trip through bankruptcy is contingent on deals with publishers. Borders filed for bankruptcy protection Wednesday.
Court documents show the Ann Arbor-based bookseller owes more than $150 million to 7 publishers, including Simon & Shuster, Random House and Penguin. Borders has also been delaying payments to publishers since December.
Jeff Manning is the Managing Director of BDO Capitol Advisors. He says it’s important to the publishers to keep Borders viable. But Manning says their support may waiver in the future, if the online and e-book markets continue to grow.
"There’s going to be a good deal of credibility that’s going to have to be built up with the management team that’s going to lead it out of ‘the Valley of Death.”
Borders has a half billion dollars in financing to get it through the bankruptcy process. Much of that money was contingent on Borders securing deals with it’s vendors prior to filing for bankruptcy protection.