When we last checked in with second-place book chain Borders, the company was teetering on the edge of financial doom. And now? Borders is gazing into the abyss, preparing to jump.

  • Borders has hired a law firm to advise it on bankruptcy and restructuring. You know what that means! (Bankruptcy.) The company's also trying to land a $500 million credit line, to "provide a bridge for the company over the next six to 12 months while it rearranges its business." Hopefully they can rearrange into selling something better than books.
  • But hey, rumors that they'd get that loan really helped out the stock.
  • Last week, Borders announced that it's cutting more than 300 jobs by closing a distribution plant in Tennessee; the company also cut 15 management positions.
  • Analysts are skeptical that there are any merger possibilities that would work for Borders. Barnes & Noble stands to gain an estimated $400 million in sales if Borders folds.
  • UPDATE: A tipster emails, "Borders HQ is laying off employees at Ann Arbor office as I type this." And, confirmed—45 layoffs today.

[Previously: Borders Death Watch, Vol. 1. Photo: AP]