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Borders, Bankrupt Book Chain, Reports Operating Loss

Borders Bookstore Closings
A store closing sign hangs outside a Borders bookstore in Washington, D.C., on Feb. 25, 2011. Photographer: Andrew Harrer/Bloomberg

April 29 (Bloomberg) -- Borders Group Inc., the bookstore chain operating in bankruptcy, today reported a loss of $24.3 million for the month ended March 26, according to court papers.

Borders, the second-largest book chain after Barnes & Noble Inc., filed for bankruptcy in February and is closing about 225 stores, a third of its total. The company’s most recent financial report filed before today with the bankruptcy court showed a loss of $479.9 million for the year ended Jan. 29, on revenue of $1.67 billion.

The current report shows revenue of $165.2 million for the month ended March 26 and total assets of $942.2 million. Cash and equivalents are $80.9 million, the company reported.

“The debtors believe they are paying all undisputed postpetition obligations according to terms,” Borders said in the filing in U.S. Bankruptcy Court in Manhattan.

The financial report comes after The U.S. Trustee, a bankruptcy watchdog for the Justice Department, today said the company hasn’t shown that it can pay the costs accrued after its petition, or bankruptcy date. The Trustee cited the lack of an operating report to show the company’s financial state, and said the company should be denied requests to pay lawyers and other professionals.

The case is In re Borders Group Inc., 11-10614, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Tiffany Kary in New York at tkary@bloomberg.net.

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net.

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