Borders will not emerge from bankruptcy successfully, but will instead be liquidated.
With no bidders interested in keeping the bookstore chain as a going concern, Borders chose to cancel the planned July 19 auction, and instead announced plans to submit a liquidation plan from Hilco and Gordon Brothers to the bankruptcy court for approval. Assuming approval goes smoothly, liquidation is set to begin July 22, 2011. The company’s remaining 399 stores will close (though some prime locations may be taken over by other booksellers), and 11,000 employees will be let go. Closures are expected to be finished by September 2011. Borders expects to pay vendors for any expenses incurred during the liquidation process.
Investor Jaham Najafi, who was seen as the company’s best hope to continue, withdrew his bid last week after a disagreement over terms with the company’s creditors.