Borders Group announced on Sunday that it plans to delay paying some of its bills, which are due at the close of January, to help "maintain liquidity" while attempting to finish the restructuring of its debt.
Last week, Borders confirmed commitment for $550 million in financial assistance from General Electric Capital. The financing is subject to conditions that include securing $175 million from other lenders and resuming store closures.
The nation's second largest book chain laid off 45 employees, most of them at the company's headquarters. Last month, Borders delayed payments to publishers as it began seeking new financing. Compounding the situation, earlier this month the chain said payments would be delayed to "vendors, landlords and others."
Borders said in a statement on Sunday that the company "understands the impact of its decision on the affected parties, but ... is committed to working with its vendors and other business partners to achieve an outcome that is in the best interest of Borders and these parties for the long term."
Shedding light on the case is one St. Louis business attorney, "The company is taking some risky moves to become more financially solvent, which should provide a very interesting outcome."
The book chain has about 19,500 employees nationwide, mostly throughout 650 Borders and Waldenbooks stores. Borders has shown a loss of almost $800 million since 2006.
Bloomberg News reported that resources from GE does not factor out a possible bankruptcy reconstruction.
"They have a long way to go before seeing any major improvements" said a Salt Lake City business lawyer who is also following the case.
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