Borders (NYSE:BGP) Says Enough, Declares Bankruptcy

After fighting against the grain for years, Borders Group Inc (NYSE:BGP) has had enough, filing for bankuptcy.

The book seller said they're going to shutter almost 33 percent of the stores as part of the process.

Some believe this could be an opportunity for rival Barnes & Noble Inc (NYSE:BKS), but they face the same challenges Borders has, and while there may be a modest boost for them in some markets, overall they need to push out their digital strategy and not be distracted by this event.

Borders President Mike Edward said the company "does not have the capital resources it needs to be a viable competitor." He's referring partially to the inability to service the large debt load the company was under.

He said that's why the company had to file for Chapter 11 bankruptcy, which will allow it to restructure its debt and remain operational.

As for the store closings, the company isn't going to wait on it, as over 30 percent will be closed over the next month.

Liabilities of Borders are $1.29 billion in debt and assets valued at $1.28 billion, as of Christmas day, 2010, according to bankruptcy documents.

The major unsecured creditors of Borders according to court documents are book publishers Pearson PLC's (LSE:PSON) Penguin $41.2 million, Hachette Book Group USA $36.9 million, and CBS's (NYSE:CBS) Simon & Schuster $33.8 million,

Borders made about every mistake a company could make in being behind the trends of their particular industry. They failed to see the permanent change in how people were reading books, and made an ill-fated attempt to sell CDs and DVDs at a time when those industries was beginning to shrink as well.

Borders last trade was $0.2284.