Borders Group

DJM Realty has been retained to exclusively manage the disposition of all remaining Borders Group and Waldenbooks real estate in the United States.

The deal between private equity firm Najafi Cos. and The Borders Group, which filed for bankruptcy protection in February, is off.

Borders Group Inc. (BGP) asked a bankruptcy judge to overrule landlords’ objections to the proposed sale of the bookstore chain’s assets and promised to provide more information about leases by next week.

Borders is trying to resolve objections from landlords at several locations, the company said in papers filed yesterday in U.S. Bankruptcy Court in Manhattan. The structure of the $215.1 million sale to Najafi Cos., which still requires an auction to test for higher bids, is set to go before U.S. Bankruptcy Judge Martin Glenn tomorrow.

Borders Group Inc., the bankrupt bookstore chain, agreed to sell its business to Najafi Cos.’ Direct Brands LLC, a direct marketer that owns Book-of-the-Month Club. The deal, which still requires an auction to test for higher bids, would save Borders from liquidation, the bookstore said yesterday in court papers.

The Borders Group plans to name a lead bidder by July 1 under an agreement with creditors.

In a filing in the United States Bankruptcy Court in Manhattan on Friday, Borders said that it would file a “a motion on or before July 1, 2011, for approval of a stalking horse bidder that shall pay the DIP [debtor in possesion] lenders in full in cash and for the approval of related bidding procedures.” A stalking horse is the preferred bidder of the debtor in bankruptcy who sets a floor for any rival bids.

Is Borders saved? The Gores Group, a Los Angeles-based private equity firm that often invests in distressed companies and has hopes to build an entertainment conglomerate, has emerged as a possible bidder for 200 of the bookstore chain’s remaining 405 stores in a deal worth about $200 million, the WSJ reports. The talks “remain fluid and could fall apart.”

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Today’s Borders’s hearing was a rather routine affair until lawyers for both sides approached the bench after Judge Martin Glenn asked for an update on where things stood. After returning from a brief meeting out of earshot from those listening on the phone, the judge adjourned the hearing. Speculation is that the attorneys were updating the judge on whether any bids for the company were made on Friday.

The executive who is steering Ann Arbor-based Borders Group Inc. through bankruptcy said in an exclusive interview with AnnArbor.com that he is confident the bookstore chain can emerge from court protection as a viable company.

But he also acknowledged that the company’s future is dependent on the willingness of publishers to agree to new terms under which they would continue to ship books to the company’s remaining stores.

“All I can tell you is that we are here fighting to the end,” Borders Inc. CEO Mike Edwards said in a rare interview.

Borders Group's recent bankruptcy filing and announced closing of more than 220 stores nationwide seems to warrant a closer look at trends in book retailing.