By now, most people have learned that one of the largest book retailers in the United States, Borders, has had to file for bankruptcy. Many held out hope that the book chain would be saved by investors or a private equity firm; however, due to the recent status of the book industry and the current economic conditions facing the country, no deals were reached.
The book chain has made plans to close their remaining stores by September and liquidate the remaining assets to pay off their creditors through a Chapter 7 bankruptcy. Therefore, if you have enjoyed visiting Borders to sip on a cup of coffee and read a fresh paperback, you better hurry in for a last visit to your nearest Borders shop.
A Chapter 11 bankruptcy would allow a company time to restructure and be taken over by another company. This was Borders’ original intention when it filed for bankruptcy protection in February. Last week, however, sources reported that the process has become a Chapter 7, meaning that the once profitable business’ remaining assets will be liquidated in order to satisfy creditor demands. Once the business’s assets have been liquidated and used to pay outstanding debts, any remaining unsecured debts held by the business will be discharged.
Many consumers and small book retailers are now questioning the future of the book industry. The invention of eReaders like the Kindle and Nook, small electronic devices that are capable of uploading digital versions of books at a fraction of the cost of physical books, have greatly reduced the demand for traditional books. While it is doubtful that traditional books will become extinct any time in the near future, book retailers are left wondering if Borders’ bankruptcy foreshadows the downfall of the industry.
The Atlanta Journal-Constitution: “Final chapter written for Borders book stores,” George Mathis, 18 Jul. 2011