New York City -- Borders Group filed for Chapter 11 bankruptcy on Wednesday. The troubled bookseller plans to close 30%, or about 200, of its most underperforming stores during the next few weeks. The long-expected filing will allow Borders to access new capital and reorganize its operations, Borders Group president Mike Edwards said in a statement.
"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," he said.
The chain has appointed Ken Hiltz, the managing partner of Southfield-based turnaround firm AlixPartners, as Borders Group senior VP -- restructuring of the company.
Borders listed $1.27 billion in assets and $1.29 billion in liabilities in its Chapter 11 filing, which was done in the U.S. Bankruptcy Court, Southern District of New York. It has fewer than 50 creditors, mostly publishers. The top creditor is Penguin Putnam, which is owed $41.1 million.
Borders recently announced it had received a commitment for $505 million in "debtor-in-possession financing" from GE Capital's Restructuring Finance division.
“We are confident that with the protection afforded under Chapter 11 and with the support of employees, publishers, suppliers and creditors and the reading public, a successful reorganization can be achieved enabling Borders to emerge from the process as a stronger and more vibrant book seller,” said Edwards.