Administrators MCR said all 45 Borders and Books Etc stores would remain open while it sought a buyer for all or some of the outlets.
Borders has suffered from increased competition from online retailers and supermarkets, and its website recently stopped taking new book orders.
MCR said Borders had "severe cash flow pressures" and that several suppliers had stopped or reduced its credit.
A number of credit insurers had also reduced their cover to Borders, which made suppliers less willing to trade with the retailer and made it difficult for it to replenish its stock levels.
"All outstanding employee wages have been paid up to date and ongoing wages for retained staff will continue to be paid as an expense of the administration, said Phil Duffy, of MCR, a business turnaround specialist.
MCR is also now conducting a review of the Borders business, which employs 1,150 people.
Waterstones owner HMV has refused to comment on recent reports it is interested in buying some of the Borders shops.
From The Bookseller trade mag website - I can't get hold of the Publishers Association. But Graeme Neill obviously has a hotline
Simon Juden, chief executive of the Publishers Association, which represents the book industry, told the Bookseller trade magazine that it was "urgently" considering the situation.
The Borders chain was originally owned by the US book giant of the same name, but was sold in June 2007 to Risk Capital Partners, which is headed by Channel 4 chairman Luke Johnson.
Risk Capital then sold it on to the private equity firm Valco earlier this year.
Marc Henstridge, head of risk for UK and Ireland at leading trade credit insurer Atradius, said his industry was not to blame for Borders' woes.
"In the case of Borders, the management team were made fully aware of the lack of trade credit insurance prior to the management buyout earlier this year," he said.
"It is therefore clear that trade credit insurers played no part its downfall - withdrawal of trade credit insurance is a symptom of a business in jeopardy, not a cause of its demise