Borders Books Files for Bankruptcy

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The popular book store chain Borders filed Chapter 11 bankruptcy, and said nearly one-third of its stores will close over the next few weeks due to serious debt problems.

The second-largest U.S. bookstore is struggling because it failed to keep up with changes in the book and music industry. More people are buying books and music online in electronic form.

Borders president Mike Edward said his chain, "Does not have the capital resources it needs to be a viable competitor," and bankruptcy was essential to restructure company debt and still operate.

The majority of Borders' 200 closings will be major superstores ranging from Manhattan's Park Avenue to the chain's hometown of Ann Arbor, Mich.

The closings will begin Feb. 19, and affect about 6,000 jobs.

Borders will receive more than $500 million in financing to help reorganize.

The company said gift cards to Borders stores will still be honored.

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