It looks like someone actually sees something salvageable in the Borders shipwreck: Yesterday, the company filed court papers saying its highest opening bid for the bankruptcy court auction of the company slated for July 19th came from Direct Brands. According to a Wall Street Journal report, the company, “a music, DVD and book distributor whose businesses include Book of the Month Club, would purchase substantially all of Borders’ assets for $215.1 million, plus the assumption of about $220 million in liabilities.”

The Phoenix-based company beat out an earlier bid from the Gores Group. As we reported in an earlier MobyLives story, Gores had been reportedly seeking to buy Borders for somewhere around $200 million.

The move makes Direct Brands the ‘stalking-horse bidder” — a distinct advantage in the auction. As the WSJ report explains, “A stalking-horse bidder like Direct Brands is often in the driver’s seat during bankruptcy court auctions, as it typically stands to reap breakup and other fees if competing bidders succeed in their bids. Borders would have to pay about a $6.5 million breakup fee should another suitor emerge to top Direct Brands’ offer ….” Nonetheless, it’s not completely impervious: “liquidators could also bid at the auction and beat its offer. Borders could be obligated to accept a bid from liquidators if it provides a better deal for lenders, publishers, landlords and other creditors.”

And, as an Associated Press wire story notes, Borders has indeed filed a liquidation plan with the court — “in case the court does not approve an auction.”

But if everything goes according to plan, says the WSJ report, and Direct Brands ultimately wins the auction, then …

… the retailer would operate as a wholly owned subsidiary of Direct Brands, the companies said. Direct Brands didn’t indicate how many Borders stores it would keep open or close. The companies said that Gordon Brothers Group and Hilco Merchant Resources LLC agreed to acquire any store locations that are ultimately not included in the sale and will close those stores in an orderly manner.