Borders formally filed for Chapter 11 bankruptcy protection in a Manhattan Federal Court, listing total debt of $1.29 billion and supposed assets of $1.275 billion. Among the top 30 unsecured creditors listed in the filing, book publishers and distributors are owed roughly $230 million (see below for the full list).Then, earlier today, she followed up with some comments in her new blog, Off on a Tangent:
The bookseller says in an announcement that it “has received commitments for $505 million in Debtor-in-Possession (DIP) financing led by GE Capital, Restructuring Finance. This financing should enable Borders to meet its obligations going forward so that our stores continue to be competitive for customers in terms of goods, services and the shopping experience.” For customers, they expect to honor the Borders Rewards program, gift cards and other customer programs and they expect “to make employee payroll and continue its benefits programs for its employees."”
The company says they had 642 stores open as of January 29. In their press release, they say they expect to close “approximately 30 percent” of those stores, or roughly 200 locations, “in the next several weeks.”
I can’t help but think--and I’m sure I’m stealing someone else’s analogy, so apologies in advance--that we’ll look back and realize massive superstore chain bookstores were the subprime loans and credit default swaps of the publishing industry. Was it really possible that a store with comfy couches, magazines, coffee, toys and games would ever be the right venue for the actual buying of books? That a company beholden to shareholders and the stock market could mesh with the art of recommending the right title to the right customer?You can at least read the second piece in its entirety here.