Borders Group Inc., the large bookseller in Chapter 11 bankruptcy, is currently searching for a buyer of more than 225 of its stores. But so far there has only been slight interest in the company with many predicting that its business model simply is no longer viable with the rise in digital publishing. Barnes & Noble expressed some interest in purchasing ten Borders stores but the terms offered by the bankrupt company was not palatable to the rival bookseller. Many fear that a Chapter 7 bankruptcy liquidation is on the horizon if the company is unable to find a buyer while in Chapter 11 bankruptcy.
Borders has already closed more than 200 stores since filing for bankruptcy protection. The chain could be forced to liquidate in the event it can’t sell the bulk of its stores, the people familiar with the matter said. Borders lost $24.3 million in March, according to court documents.
Borders has not confirmed that it may face liquidation if unable to find a buyer, but those watching the bankruptcy case of this bookseller have noted that publishers have consistently expressed their lack of faith in the company. As of now, Borders is being forced to pay cash for the books it receives from publishers because of fears that they simply won’t get paid. Borders has tried to negotiate new credit terms with publishers but many are simply refusing to extend any credit to the company in bankruptcy. Some publishers have gone as far to say that they don’t see themselves extending any credit to the bookstore in the near future.
(source: Online.wsj.com )