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June 16 (Bloomberg) -- Borders Group Inc., the bankrupt bookstore chain, said it may have a deal with lenders and creditors to avoid closing as many as 51 stores, and it canceled an auction scheduled for today, according to a bankruptcy court filing.
Borders has held extensive negotiations with its lenders and the committee of unsecured creditors about an amendment to its financing that would avoid closing the stores, according to filings yesterday and June 8.
“The debtors believe that the parties have reached an agreement in principle, subject to documentation, and hope to finalize an agreement, subject to court approval, in the very near term,” yesterday’s filing said.
Mary Davis, a Borders spokeswoman, declined to comment.
Borders said June 9 it would close 51 stores. The company, the second-largest book chain after Barnes & Noble Inc., had 642 stores in February when it filed for court protection and, after closing 237 of them, has 405 still operating. Under Chapter 11 of the bankruptcy code, the company would hold an auction to sell itself and find the best deal to repay its creditors.
The case is In re Borders Group Inc., 11-10614, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
--With assistance from Matthew Townsend in New York. Editors: Mary Romano, Joe Schneider
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