Borders Names New Chairman

The Borders Group Inc. (Ann Arbor, Mich.) has named Richard McGuire, a hedge fund executive, as chairman. McGuire is with Pershing Square Capital Management LP (New York), the activist fund that is Borders’s largest shareholder and has agitated for change at the company over the last year. He replaces Larry Pollock, who had been serving as non-executive chairman for the last two and a half years.

The move, explained by the retailer “as part of its effort to stay afloat,” comes a week after another financial industry executive, Ron Marshall of Wildridge Capital Management (Edina, Minn.), was named ceo.

Borders has been working with restructuring advisers to assist in negotiating with vendors and lenders, said the New York Times, including AlixPartners, a consulting firm; Jones Day, a law firm with a well-regarded restructuring practice; and Rothschild, the investment bank.

Pershing Square lent the company $42.5 million in April 2008, a loan that comes due next month. The hedge fund, led by William Ackman, has been active in calling for changes at the company. Last spring, Borders put itself on sale at Pershing’s behest, but by November took itself off the auction block as a merger with Barnes & Noble became increasingly unlikely.