Borders delays January payments to some suppliers
31.01.11 | Graeme Neill
Borders has told some US publishers and landlords it is delaying January payments to them, in a bid to complete a debt restructuring.
The announcement comes just days after the troubled retailer secured funding from GE Capital.
Reuters reports Borders said the move will enable it to "maintain liquidity", adding while the move will impact its vendors and landlords, it is in the best long term interest for the bookseller.
Under the terms of Borders' new funding, publishers, among other suppliers, must agree to provide financing. However, publishers told the newswire they lack details about the financing and are unable to make a decision about how to progress with Borders.
Speaking to the Wall Street Journal, Donald Workman, head of bankruptcy practice at law firm Baker & Hostetler, said: “It seems very likely, if not inevitable, that Borders will have to file bankruptcy."
He added: "It will ultimately be a liquidation. The market can’t support two huge chains of bookstores, just as the market could not support [electronics chains] Best Buy and Circuit City."