Wondering what’s going on with Borders? Us too. It’s been ominously quiet in the several days since our last report, while everyone waited to hear what transpired in meetings between Borders execs and New York’s Big Six publishers. But now, a report by Jim Milliot at Publishers Weekly fills us in — and the news is not great.

Accordng to Milliot,

At last week’s meetings with publishers, some of which included Bennett LeBow, Borders chairman and largest shareholder, it was clear that while publishers want Borders to survive, there are limits on how much support the major houses are able to provide. Borders’s proposal to turn the delayed payments owed to publishers into interest-bearing notes met with a cool reception, and publishers were frustrated that Borders executives couldn’t supply more information….

The lack of specifics and what appears to be a deteriorating situation reportedly prompted one publisher to tell Borders it should go ahead and file for bankruptcy.

In fact, Milliot continues, as a result of the dispiriting meetings, “for the first time the book industry is openly, and in many cases actively, planning for what business will be like without the nation’s second largest bookstore chain.” While publishers wait for a more detailed “turnaround plan” from Borders this week, more and more are coming to support the bankruptcy idea — as Milliot details, “Indeed, there appears to be a growing sentiment that Borders’s best option might be to file for a prepackaged bankruptcy. Such a filing would need creditor and shareholder support, but would be cheaper and quicker than a regular Chapter 11 filing, and it would give Borders the chance to shed unprofitable leases, something Borders is eager to do since expensive leases are one of the retailer’s biggest problems.”

It’s an endgame, if an ugly one. But meanwhile, publishers are rethinking and in some instances cancelling author tours that include events at Borders, while also rethinking print runs for a world with 674 fewer bookstores … which is already two fewer bookstores than we reported last week.