Judge Martin Glenn of the U.S. Bankruptcy Court in Manhattan cleared the way for the beleaguered Borders bookstore chain to auction itself off on Tuesday with a team of liquidators as its opening bidder and likely winner.  The Judge gave his approval despite objections from a group of landlords, telling the complaining lawyers, “We’re not going to put all of this off.  This sales process is moving forward.”

 

The move to liquidation came after the Creditors Committee torpedoed the stalking horse bid by the Najafi Companies’ Direct Brands, which might have kept at least part of the Borders chain going, but which would have yielded just $215 million in cash versus the $254 million that the committee believed could be raised by a straight liquidation (see “Borders Headed for Dismantling?”).

 

According to the Wall St. Journal, the Judge set a deadline of 5pm Sunday for any new bids.  It is possible that the Najafi Group or some other entity could come up with a better bid, and it is likely that the Borders Group would be open to any offers that would allow the company to survive that it receives up until the actual auction on Tuesday, when it will likely go to a group of liquidators headed by Hilco Merchant Resources and the Gordon Brothers Group.

 

If no buyer emerges by Tuesday, Borders, a chain that started with a single store in 1971 and grew to an armada of over 1,000 stores that struck fear in the hearts of independent booksellers, will be out of business and the company’s 11,000 remaining employees will be out of work in a very depressed economy.

In another sign of the likely outcome, Borders buyers have reportedly canceled their Comic-Con trip to meet with suppliers.