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Posted on Mon, Jan 31, 2011 : 9:55 a.m.

Landlords join the list of parties stung by Borders' financial troubles

By Nathan Bomey

Ann Arbor-based Borders Group Inc. said late Sunday that it would delay payments to some landlords in an effort to preserve its ability to operate its day-to-day business.

Borders said in a statement that it would "delay payments to certain parties — vendors, landlords and others — scheduled for the end of January."

The move is designed to help the company boost its financial position while it tries to secure new financing and new agreements with its publishers. The company had already suspended payments to some publishers.

The news comes after Borders said Thursday that GE Capital had agreed to provide a new $550 million line of credit if Borders is able to line up other sources of funding, convince its publishers to agree to new financial arrangements and identify new stores to close.

Borders stock (NYSE: BGP) slipped 8.12 percent to $0.78 minutes after the market opened this morning.

Borders, which employs about 550 workers at its headquarters in Ann Arbor, is actively trying to avoid bankruptcy — a process that would almost certainly wipe out the equity of its shareholders, result in many store closures and raise the possibility of liquidation.

But bankruptcy would also give the company a chance to reduce its costly lease footprint. That means landlords may be reluctant to force Borders to deliver January payments immediately.

Contact's Nathan Bomey at (734) 623-2587 or You can also follow him on Twitter or subscribe to's newsletters.



Mon, Jan 31, 2011 : 4:46 p.m.

It looks like the Border's family had some good foresight to sell the business years ago. It's just too bad that this great business is taking such a hey, so are thousands of others.


Mon, Jan 31, 2011 : 4:46 p.m.

sorry but does not look good at all. might as well hang it up and go under


Mon, Jan 31, 2011 : 4:42 p.m.

Yeah, Bill, Linda & Jaxie, Borders hasn't contributed one dime to this community. And they've been hogging all that space on Liberty & Maynard for too long. Let's open it up for say, a Dollar General store or a new burger joint. Damn corporation! Lord help anybody who is trying to remain solvent. And Bill, i don't know where you've been during this housing crisis, but the foreclosures happen when people choose to pay other bills than their mortgage, whether it be food, gas & clothing or a night out on the town, so your comment seems inappropriate to the situation. And Linda, I don't see Borders thrusting anything upon you, they are taking steps to preserve themselves and remain viable. Are you perhaps one of the landlords spoken of in the article? If not, then I don't see where you fit in. By your measure, the automotive industry in Michigan should have shut down. That would've been great for everyone who lives here, wouldn't it? Zombie corporations? Really? Really?


Tue, Feb 1, 2011 : 2:02 p.m.

@ Bear, yeah right, inappropriate? Hmm, let's see what happens when you (Bear) stop being your mortgage or stop going to work without contacting your employer or lender in advance to work out alternate arrangements? I may not know much about foreclosure law as pointed out earlier, but I do know a little about sensible business practices and paying your debts when you incur them. Border's, MCI, Ingersoll, Enron, and the like are all guilty of pushing their bad business practices on others and it sickens me (as it should you) that instead of letting them wither and die, they try to sustain themselves by making others suffer, e.g. landlords, captive employees, and distributors.


Mon, Jan 31, 2011 : 4:05 p.m.

Bill / Linda & Jaxie have a point! The quicker the 19,000 employees ( including about 500 locals) can get to collect unemployment the better, right? I mean, there's a HUGE job market open out there. The world is their oyster! How unfair for them!


Mon, Jan 31, 2011 : 3:35 p.m.

I agree with Linda, zombie corporations should close down and get out of the way for live, robust corporations. The longer we prop up the living dead, the worse it will be for the rest of us.

Linda Peck

Mon, Jan 31, 2011 : 3:25 p.m.

Yes, I agree with Bill. I am done with irresponsible corporate American companies who cannot maintain their obligations and thrust them on us. Corporations are not people and for some reason they have more privileges than people. What the heck? Are we tired enough of it to rise up and stop this foolishness? If a business cannot survive legitimately, then it should close down. Change happens.


Mon, Jan 31, 2011 : 3:14 p.m.

Don't you just love how insolvent corporations can just choose whom to pay and when? Meanwhile, the average American gets evicted out of his/her house or foreclosed upon. Nice! Ah, Capitalism.


Mon, Jan 31, 2011 : 4:48 p.m.

So if a person is late by a few days or weeks they are foreclosed or evicted? Tell us all you know about foreclosure law and eviction law. You do know of course that say your mortgage were due on the 1st of the month, and the lender usually allows a "grace period" for being late (around the 15th), then in most cases would not even consider you in default until you were at least TWO months behind, THEN after the third month would start the foreclosure process, which gives you another couple months to find a way to pay. THEN even after a sheriffs sale you have six months to redeem the property if you can pay the balance in full. THEN it is a separate and new court proceeding to actually evict the person (at least 30 days). So all told the time frame for a person in foreclosure to stay in a property without paying a dime is 12 months. Of course, even after all that, if the mortgage company sells your property below what you owe on it, they can not collect the balance from you. I hardly think Borders deciding to DELAY payments is nearly the same, and if they do not pay for several months the landlords will force bankruptcy. I would ask you to fin oout ffrom the landlord in Pittsfield Twp where Borders, Best Buy and Kohl's is located how that worked out for them with Linen's N Things, or how Arborland likes that process with the old Circuit City building, which both STILL sit vacant.