Borders preps for bankruptcy

Filing is being readied for Monday or Tuesday, reports the WSJ. This is likely to be ugly: Initial plans are to close about 200 of the chain's 674 stores, with an option to shut down another 50. That's thousands of lost jobs. I counted about 35 Socal stores on its Web site.

Borders warned of looming cash problems in December and stopped paying certain bills, leaving publishers, landlords and others in the lurch. The company reached a tentative deal with GE Capital for a new $550 million secured credit line that came with several tough conditions. To get the financing and avoid bankruptcy, Borders needed to persuaded publishers or others to convert unpaid bills to $125 million in loans. Publishers balked at the request and told Borders it wanted the company to use bankruptcy proceedings to close stores and become more viable, said a person familiar with the situation.