BordersAnn Arbor, Michigan based book seller, Borders, may file for Chapter 11 bankruptcy as soon as this Monday or Tuesday.  According to reports from The Wall Street Journal, the company is in the final stages of preparing for this bankruptcy filing.

Borders was founded in the 1971 as a small book retailer run by brothers Tom and Louis Borders.  The store quickly gained popularity because of its ability to provide a wide variety of titles and products.  In the 1990s, Borders ran with its popularity and expanded nationwide.  The company also has operations overseas, which played a hand in increasing its debt.

Although it achieved great popularity from its expansion in the 1990s, its progress has slowed due to varying obstacles.  One of the obstacles that The Wall Street Journal has identified was the handover of Borders’ Internet operations to Inc. nearly a decade ago.  At the time, Borders’ Internet operations were weak, but by the time it was able to relaunch its website, Amazon had already asserted dominance.

Other obstacles listed were its stock buyback program, binding store leases lasting 15-20 years, and going through a few different CEOs that executed different business plans.  Additionally, The Wall Street Journal cited “management gaffes,” unsustainable debts, weak net presence, and the rise of e-readers like Amazon’s Kindle as hurdles.  As a result, publishers cut shipments to the store.  Borders also briefly put itself up for sale in March 2008, but was not made any offers.

The company plans to use the financing agreements to keep it functioning during the Chapter 11 restructuring.  It is expected to close hundreds of stores and cut thousands of jobs.  At the moment, Borders plans to close a third of its 674 Borders and Waldenbooks stores and lessen its present staff of 19,500.   It is currently receiving pitches from Bank of America Corp. and General Electric Co. for around $450 million in financing.  It is also in talks with the lender GA Capital LLC, which plans to convert approximately $50 million on Borders’ junior debt to bankruptcy financing and contribute about $10 million in raw capital.