NEW YORK ( TheStreet) -- Borders ( BGP) stock is tanking Tuesday morning after reports surfaced over the weekend that the company has hired bankruptcy and restructuring lawyers.

As the company continues talks to secure a $500 million credit line, it has also hired law firm Kasowitz, Beson, Torres & Friedman, the Wall Street Journal reported late Friday, citing sources familiar with the matter. But the sources said Kasowitz's job is to keep Borders out of bankruptcy court.

Shares of Borders are falling 12.3% to 93 cents in morning trading.

>>Borders' Mistakes: Chapter by Chapter

Kasowitz met with publishers on Thursday to pitch them a plan to defer payments and is in talks with GE Capital about providing a new revolving credit facility, the source told the Journal.

Borders hopes this new funding could help it repay its $220 million in current outstanding senior debt and allow business to continue over the next year.

Separately, the company also said on Monday that it is cutting 45 jobs at its headquarter in Ann Arbor, Mich. The layoffs will occur in human resources, finance, merchandising and distribution centers.

Last week the book seller said it is shuttering its distribution center in Tennessee and eliminating 310 positions.

As Borders grapples with declining sales, it is also looking to entice customers with deep promotions. Today, the retailer is offering 75% off select merchandise in stores and online.

--Written by Jeanine Poggi in New York.

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