New York — Borders Group moved closer to liquidation after a judge on Thursday approved its motion to auction itself off with an offer from liquidators as its opening bid. The retailer said it will accept bids until 5 p.m. Sunday and will give notice by Monday if no other bidder emerges.
The move came after an offer made earlier this month from a private-equity investor, Phoenix-based Najafi, fell apart seemingly overnight. Najafi had offered $215 million for the company, plus the assumption of $220 million in debt. But landlords and creditors objected, saying that the deal would not prevent Najafi from taking possession of the company and liquidating it immediately for profit.
Creditors say a bid from liquidators Hilco Merchant Resources and Gordon Brothers is stronger, and would pay out between $252 million and $284 million in cash.
On Thursday, Borders said it wouldn't seek approval for Najafi's bid at a scheduled hearing in the U.S. Bankruptcy Court Southern District of New York and designated the liquidators as the primary, or "stalking horse" bid.