The future of Borders has become much clearer with a motion filed late Friday that asks the court to approve a new motion that will permit it to sell “substantially all of its assets” by July 29. If the motion is not approved, or an agreement to sell the company is not reached, Borders said it will liquidate the bookstore chain as quickly as possible.

Under the proposed second amendment agreement, Borders will name a stalking horse bidder for the chain by July 1 and the company would be able to continue operating and complete the sale process, with a new set of deadlines in place that would wrap up a sale by July 29. In addition to the deadline for a stalking horse bidder, who will pay the lenders in full, are ones calling for an order approving the stalking horse bidder and bidding procedures on or before July 15, followed by an auction on July 19, and a hearing on or before July 22.

In its request for approval of the amendment, Borders notes: “If the Court does not approve the Second Amendment, the Debtors may lose the opportunity to enter into a going concern sale. The Debtors also face a substantial risk of severe disruption to their business operations and irreparable harm to the ultimate value they can obtain from their assets.” The company stressed that talks over the sale of the company have “gained significant momentum in recent weeks,” and the Borders is “encouraged one of the parties negotiating with the Debtors will emerge as the successful buyer on a going concern basis.”

The proposed amendment would also enable Borders to liquidate up to ten small format stores if the landlords for these locations terminate leases at will in accordance with their terms. It also calls for the closing of three stores—Ocean County Mall in Toms River, N.J.; Valley River Center in Eugene, Ore., and McCarran Airport in Las Vegas—as well as an updated appraisal of Borders’s assets by June 30.

In exchange for these benefits, the DIP Lenders have increased the minimum availability requirements from $25 million to $30 million. Borders will pay a fee of $1 million.

On June 15, 2011, Borders filed a notice cancelling the auction for the additional closing stores. This morning’s hearing on the matter was also cancelled, and a hearing on the proposed amendment is now scheduled for Wednesday June 22 at 11 a.m. Borders said if the second amendment is not approved, it will be in default under its creditor agreement and would force it to begin liquidating the company on an expedited basis.