I would have left Borders (NYSE: BGP) for dead a long, long time ago In fact, I wrote off its chances of success way back in autumn 2008. The bookseller has continued to stagger along, though, with a lot of help from a major shareholder. Today, Borders announced yet another development in its ongoing saga.

Financier Bennett LeBow has snapped up a 15.5% stake in the bookseller. As part of the deal, he will become the company's chairman. LeBow's stake provided $25 million in new liquidity to the company, helping to shore up its balance sheet. The dilution diminishes the relative stake of Borders' current top shareholder, Bill Ackman of Pershing Square Capital Management, which will dwindle to 14.8% from 17.7%.

Investors should expect further dilution from the deal, since the company is asking shareholders to allow it to offer LeBow warrants. That would permit LeBow to buy 35.1 million shares of Borders' stock for $2.25 apiece, giving the struggling company nearly $80 million in extra cash. But Ackman is also receiving warrants, and could receive even more if LeBow exercises his.

Regardless of the new cash influx, individual investors should still steer clear of Borders. The bookseller has its work cut out for it, contending with everyone from Barnes & Noble (NYSE: BKS) to Wal-Mart (NYSE: WMT), not to mention fierce rivalry in the e-book market from Amazon.com (Nasdaq: AMZN) and even Apple (Nasdaq: AAPL). Even though Borders recently launched its own e-reader, it's up against stiff competition.

Long-standing major shareholder Ackman has made some very optimistic statements about Borders' potential to survive. However, just a week ago, he admitted that Borders isn't "out of the woods," acknowledging that two bricks-and-mortar bookstore chains might be one too many. He even referred to Pershing as a "stuckholder." Ouch.

LeBow is a "financier," and while he's touted as being good at turnaround efforts, I'm not sure he'll be up to the difficult task of helping to repair a retailer. He's already chairman of tobacco company Vector Group (NYSE: VGR).

Investors might also want to cast a little skepticism on the idea that financial types yield great retail turnarounds. Sears Holdings (Nasdaq: SHLD) Chairman Eddie Lampert had a great reputation as a hedge fund manager, but he's had a hard time reviving Sears and Kmart operations. Sears recently reported a lackluster quarter, complete with plunging profit, and has struggled to remain relevant amid competition from the likes of Wal-Mart.

Is this Borders' big chance, and a huge opportunity for investors? Or is the bookseller a zombie retailer in search of fresh brains? Let us know in the comments box below.

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Alyce Lomax does not own shares of any of the companies mentioned. The Fool has a disclosure policy.