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Borders Is Bankruptcy-Bound, Poll Says

NEW YORK ( TheStreet) -- Borders (BGP) is headed toward bankruptcy, according to TheStreet readers.

In our poll, 70.9% of voters said a Borders Ch. 11 filing is imminent, while just 29.1% expect the book seller to be able to navigate its current shortcomings out of bankruptcy court.

The overwhelming majority is bearish on the company, even after reports surfaced late last week saying Borders is not seeking bankruptcy protection and is currently working with restructuring advisors to attempt to fix its balance sheet.

The Wall Street Journal reported on Thursday evening that Borders hired restructuring experts Jeffries & Co., as well as FTI Consulting.

The market reacted favorably to this news, sending shares up more than 20%. But the stock has been pressured over the past week following warnings from the company.

Borders raised red flags late in 2010 when it said that it may have to delay payments to some of its vendors as it attempts to negotiate new loan terms. The company also warned that delaying these payments may result in a violation of the terms of its existing credit agreements in the early part of the year, and that it could experience a liquidity shortfall.

There already appears to be backlash from publishers, with the Journal reporting last week that one of Borders' major suppliers is temporarily halting the shipment of books to the retailer. The report cited publisher Rowman & Littlefield Publishing, whose CEO told the Journal that it has stopped shipping to Borders until it has more information on its payment plans.

Lenders, including Bank of America (BAC) and General Electric's GE Capital, provided Borders last year with a loan up to $970 million under a revolving credit line. It has another $90 million in loans on top of this from lower-ranking creditors.
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