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Borders on brink of liquidation after creditors object to proposal

Borders

What only two weeks ago looked like a promising proposal to save the bankrupt Borders Group suddenly fell apart Wednesday, likely leaving the remains of the nation’s second-largest bookstore chain to be picked over by liquidators.

Phoenix-based private equity firm Najafi Cos., which owns the Book of the Month Club and Columbia House, submitted a $215 million bid for the bookseller on July 1, but The Associated Press reports that creditors objected, saying nothing would prevent the company from liquidating the retailer immediately after taking possession.

The publisher-led creditor committee insists that a bid from liquidators Hilco Merchant Resources and Gordon Brothers is stronger, and would amount to between between $252 million and $284 million in cash. In a court filing, the creditors said they hoped Najafi would increase its bid, which included the assumption of $220 million in liabilities. However, Najafi is standing firm.

Although another bidder could step in before Sunday’s bidding deadline, The Wall Street Journal’s contends Borders “looks to be headed to the scrap heap.”

In a statement sent Wednesday to the bookseller’s nearly 11,000 employees, Borders President Mike Edwards said that he remains hopeful another offer will emerge. “In the meantime, as the process moves forward, we will continue to conduct business as usual,” he wrote. “Our stores remain open, and Borders.com is fulfilling orders as usual. It’s important that we all stay focused recognizing that media speculation will no doubt continue.”

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7 Comments

Having grown up in Michigan and having worked for Borders myself. This just breaks my heart.

I knew it was the beginning of the end when the Borders store I frequented got rid of their massive DVD section. Back then I still wouldn’t have believed Barnes and Noble would outlive them though. May have to go book shopping this weekend, the sales right now will be far better than when the liquidators take over.

The heartbreaking part is that they’ll have to evict all the manga fans camped out on the floor. They’ll have to fight it out with the manga-moochers at Barnes & Noble for reading space.

It’s really a shame. I still miss my local Borders, which closed a few months ago. It was a nice place to visit and the staff were awesome.

As an ex-Ann Arborite…I’ll always have the original independent Borders in my heart.

Just sad.

sad that boarders is looking like an old dinosaur ready to die and fade away joiining other dead businesses. and thus giving barnes and nobles a monopoly of book sellers. sad to see Boarders die now.

Great. That leaves my home town without a bookstore, period. America picks up speed in its race to third world status.

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