By Hannah Johnson

The Borders Group filed for Chapter 11 bankruptcy on Wednesday and will receive $505 million in Debtor-in Possession (DIP) financing. According to the press release, Borders will continue “serve customers in the normal course” but will close approximately 30% of its retail locations under its Store Reduction Program.

Publishers Weekly reports that Borders owes millions of dollars to publishers: “Publishers are on the hook for hundreds of millions of dollars led by Penguin Group (USA) which is owned $41.1 million, followed by Hachette at $36.9 million, Simon & Schuster at $33.8 million, Random House at $33.5 million, and HarperCollins at $25.8 million.”

According to The Wall Street Journal, Borders earlier sought $550 million in credit with GE Capital in order to avoid bankruptcy, but “the retailer first had to hit certain benchmarks, such as negotiating more favorable store leases with its landlords and finding other lenders to take on $175 million of the credit line.”

Bloomberg reports that Borders’ “market value shrunk by more than $3 billion since 1998, [and] racked up losses by failing to adapt to shifts in how consumers shop.” The primary shift has been away from brick-and-mortar retail and towards online shopping. Borders launched its online bookstore in 2008.

Borders has set up a website specifically to address questions and provide information about its reorganization process: www.bordersreorganizes.com. The site includes press releases, court documents and case information, and FAQs for customers, vendors and shareholders.