Borders will continue to operate under Chapter 11, and has received commitments for $505 million in debtor-in-possession financing led by GE Capital, Restructuring Finance, which will enable Borders to meet its obligations going forward. It also affords Borders the opportunity implement an appropriate business strategy to reposition the brand, according to Edwards.
The company will continue to honor its Borders Rewards program, gift cards and other customer programs. Additionally, the company expects to make employee payroll and continue its benefits programs for its employees.
"It has become increasingly clear that in light of the environment of curtailed customer spending, our ongoing discussions with publishers and other vendor related parties, and the company's lack of liquidity, Borders Group does not have the capital resources it needs to be a viable competitor and which are essential for it to move forward with its business strategy to reposition itself successfully for the long term,” says Mike Edwards, president of Borders Group. “This decisive action will give Borders the opportunity to achieve a proper infusion of capital in order to have the opportunity to have the time to reorganize in order to reposition itself to be a successful business for the long term."