Borders, a large-scale retail book chain with a brick-and-mortar and online presence, has felt the tug of the recession and has announced that it has filed Chapter 11 bankruptcy as of February 16, 2011.
According to the press release on the official Borders Reorganization website, “It has become increasingly clear that in light of the environment of curtailed customer spending, our ongoing discussions with publishers and other vendor related parties, and the company’s lack of liquidity, Borders Group does not have the capital resources it needs to be a viable competitor and which are essential for it to move forward with its business strategy to reposition itself successfully for the long term. To position Borders to remedy this condition, Borders Group, with the authorization of its board of directors, has filed a petition for reorganization relief under Chapter 11 of the Bankruptcy Code.”
What Bankruptcy Means to Borders Customers
Borders made several announcements key to its customers. Among them are:
- Borders is not going out of business.
- This will not affect the selection of books and other goods and services that Borders offers.
- The Borders Rewards Plus program is still in affect.
- Borders online will remain operational.
- This will not affect your eLibrary if you have one through Borders.com.
Borders Store Closings
Due to the bankruptcy and restructuring process, Borders will be forced to close some of its local under-performing chain stores. A complete Chapter 11 Store Closure List is online for the public.
This list is not final, but it is quite long and includes such well-known locations as the Union Square Borders in San Francisco, CA and the San Jose, CA store in Santana Row.
Borders Vendors Facts
With such a large chain undergoing such major changes, questions may arise as to what happens to their vendors in this situation. The press release indicates the following:
- Vendors will be paid in full under normal terms for invoices for goods and services provided after the filing date of February 16, 2011.
- The Garden City Group is serving as Borders' claims agent
Holding Borders Stock
If you’re still holding onto some shares in Borders, the news unfortunately is not good. According to FAQs for Investors about Borders' Reorganization, “Borders common stock ceased trading on the New York Stock Exchange as of the close of the Market on February 15, 2011.”
Shareholders will not be entitled to file a claim with the bankruptcy court for the value paid for shares.
If you’re a customer, shareholder or vendor, more information will be available at www.bordersreorganization.com or at the new Reorganization Information Line toll-free at (877) 906-7675.
Rhiana Jones - Rhiana Jones is a freelance writer with a business background in customer service, marketing, and copywriting. She is a former ...
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