Borders Group Inc. (NYSE:BPG) has filed for Chapter 11 protection today. The Ann Arbor, Michigan based company is shutting down 30% of their stores nationwide. Borders is seeking protection from creditors as they filed for bankruptcy at the U.S. Bankruptcy Court in Manhattan.
“It has become increasingly clear that in light of the environment of curtailed customer spending… and the company’s lack of liquidity, Borders Group does not have the capital resources it needs to be a viable competitor,” stated Borders Group President Mike Edwards.
The Chapter 11 will allow Borders to reorganize and give them access to new capital. Borders received a $505 million loan from GE Capital to reorganize operations while in bankruptcy. Borders has assets worth up to around $1.28 billion and liabilities that are around $1.29 billion as of December 25th. Borders’ five largest creditors include Penguin Putnam Inc., Hachette Book Group, Simon & Schuster Inc., Random House, and Harper Collins Publishers.