Most of the time, people don't consider the effects the poor economy can have on industries considered to be "big business." Unfortunately, no company is immune to the ebb and flow of the country's current economic state. In fact, one of the nation's most prominent names in book sales will begin the process of liquidating retail locations as a measure of debt relief in the very near future. The Borders' liquidation will also include massive price cuts at the company's 18 remaining stores in southern California.

Recently, a bankruptcy judge in New York signed off the liquidation plan, and approved a "sell off" that will be conducted by Hilco Merchant Resources and Gordon Brothers Group. The debt relief measures come as a shock to many people because, up until very recently, Borders appeared to be holding its own.

Unfortunately, the company's unsecured creditors recently rejected a $215.1 million buyout, marking the beginning of the end of the Borders era. Spokespeople state that a few executive missteps led to the company's downfall.

Unable to manage falling sales, Borders filed for bankruptcy protection in February of this year. At the time of the filing, the company maintained 42 stores in California, and has already closed over half of those locations. However, while the closing of the book sales giant may come as a disappointment for many, filing for bankruptcy protection and taking measures to liquidate company components is likely a wise choice on the part of company administrators.

Allowing debts to go unmanaged only leads to future difficulty. Business professionals in California may benefit from recognizing that bankruptcy protection can be the right choice when dealing with a failing company.

Source: Los Angeles Times, "Borders bookstores to liquidate," Andrew Khouri, July 22, 2011