Borders has succumbed to the inevitable. After failing to make publisher payments since late last year, the U.S. retail chain has filed for Chapter 11 bankruptcy protection and will close 200 stores “ or 30% of all locations “ as it attempts to restructure.
According to Publishers Weekly, the filing was precipitated when Ingram implemented an ordering freeze last night.
Publishers are on the hook for hundreds of millions of dollars led by Penguin Group (USA) which is owned $41.1 million, followed by Hachette at $36.9 million, Simon & Schuster at $33.8 million, Random House at $33.5 million, and HarperCollins at $25.8 million. Neither major book distributor, Ingram or Baker & Taylor were among the leading creditors, and only one book distributor, National Book Network, which is out $2 million. The filing listed $1.27 billion in assets and $1.29 billion in liabilities. Borders said it expects to be able to pay vendors for merchandise shipped to it after today’s filing 16; those owed money prior to the filing will only be paid with the approval of the bankruptcy court.