A judge granted Borders an extension to file its reorganization plan under bankruptcy protection, but a sale of some of its stores appears more likely.
A Borders lawyer confirmed Thursday that a bankruptcy judge granted the extension at hearing in New York.
Borders now has until October to file a plan with the court, but Andrew K. Glenn said he expects to file a motion in two to four weeks about selling the company. The plan was originally due June 16.
Glenn confirmed Borders is in talks with several buyers to sell all or most of its stores.
Thursday's hearing followed unconfirmed reports that private equity firm Gores Group is in talks to buy about 200 of Borders' roughly 400 remaining stores.
Ann Arbor, Mich.-based Borders filed for Chapter 11 bankruptcy protection in February in the face of declining sales and tough competition from discounters and online book sellers.
The chain has made several efforts to add new types of inventory, beef up its website and enter the digital market, but critics say the change came too late to significantly improve the company's prospects.
Borders was hoping to emerge from bank protection by August or September as a smaller and more profitable company. But speculation has swirled almost since the bankruptcy proceedings began that the company may not be able to reorganize as quickly as creditors would like and could be forced to liquidate.
Borders, which started with a single store in 1971, pioneered the book superstore concept along with Barnes & Noble, which is based in New York.
A Borders spokeswoman did not immediately respond to a request for comment.