Events are coming to a head at Borders as the chain works to stay within the requirements of its DIP financing while juggling offers for some of its assets. According to sources, on Wednesday the creditors’ committee asked the Gores Group to revise its bid. On Thursday, faced with what it termed a “Hobson’s choice,” in which there is only one option, Borders filed to close up to 51 of its most profitable stores or stores with under market leases in two weeks. Among the outlets are stores in downtown Boston, Phoenix, Arlington, Tex., and three in New York City.

In mid-March Borders received an extension from the court to reject leases through September 14. The 51 stores in question have not yet signed stipulations extending lease rejection dates, although they still could. As of today, close to 365 Borders locations, or 90%, have. Without the closings, Borders could jeopardize its DIP facility, but with them, as Holly Felder Etlin notes in a supporting declaration, the retailer risks the sale of the business as a going concern. These are stores in which bidders had expressed interest. “The Debtors would assume these leases,” notes Etlin, “but various creditor constituencies have indicated that they would oppose any such assumption outside of the context of a sale of the business as a going concern or confirmation of a plan of reorganization.”

In keeping with the terms of the DIP, Borders sent solicitation letters to liquidators on June 1 to bid on liquidating the stores. By Tuesday’s deadline to select a stalking horse bidder none had stepped forward. However, they did receive a letter from joint bidders citing a provision that they must have consent from both Borders and the Dip lenders.

To stay on schedule, an auction among liquidating bidders would take place, June 16, and with court approval the Store Closing Sales would begin June 22. Borders is hopeful that at worst, it will only need to close a few stores.

On the possible sale of 200 stores to Gores Group, sources said the creditors’ committee was not comfortable with certain aspects of the proposal, especially in light of additional potential bidders for some stores. “It was the kind of proposal you would expect from someone who has no competition,” said a source familiar with the proposal. “That’s not the case anymore.”

To see the list of stores that may close, click here download the complete filing and scroll down to page 32.